Gauhati High Court
WA/199/2021 on 5 April, 2022
GAHC010122932021
Judgment reserved on :3rd January,2022
Judgment delivered on : 05th April, 2022
IN THE GAUHATI HIGH COURT
(HIGH COURT OF ASSAM, NAGALAND, MIZORAM & ARUNACHAL PRADESH)
WRIT APPEALNO.198 OF 2021
Arising out of W.P.(C) No. 8696/2019
Writ Appeal No.198 of 2021, TAFE Motors
and Tractors Ltd, (a wholly owned subsidiary
company of TAFE) registered office at 77,
Nungambakkam High Road, Chennai, Pin-
600034, represented by its Vice President Mr. C.
P. Sounderarajan.
........Appellant
-Versus-
1. The State of Assam,
Represented by the Principal Secretary to the
Government of Assam, Agriculture Department,
Dispur, Guwahati-781006.
Writ Appeal No. 198 of 2021
Writ Appeal No. 199 of 2021
Page 1 of 29
2. The Commissioner & Secretary to the
Government of Assam, Agriculture Department,
Dispur, Guwahati-781006.
3. The Director of Agriculture, Government of
Assam, Khanapara, Guwahati-781022.
4. The Chief Executive Officer, Mega Mission
Society, Chief Minister Samagra Gramya Unnayan
Yojna, Jaya Nagar, Khanapara, Guwahati-781022.
5. The Bid Evaluation Committee represented by
its Chairman cum Secy. to the Govt. of Assam
Agriculture Deptt. Dispur, Guwahati-781006.
6. M/S Escorts Ltd. having its regd. office at 15/5
Mathura Road, Faridabad, Haryana, Pin- 121003.
7. M/S Action Construction Pvt Ltd, having its
regd. office at Dudhola Link Road, Vill. Dudhola,
Dist. Palwal, Haryana, Pin- 121102.
8. M/S International Tractors Ltd (Sonalika)
having its regd. office at Vill. Chak Gurjaran, P.O.
Piplanwala, Jalandhar Road, Hoshiarpur.
9. M/S Mahindra and Mahindra Ltd., Swaraj
Division having its regd. office at Phase-IV,
Industrial Area Sas Nagar (Mohali), Punjab, Pin-
160055.
10. M/S Mahindra and Mahindra having its regd.
office at first floor Mahindra Towers Murli Road,
Kandivili (East), Mumbai, Pin- 400101.
11. M/S Case New Holland Industrial Pvt Ltd.
having its regd. office at Third Floor Plot no. 14
A, Sector 18 ATC Building, Maruti Industrial
Complex Gurugram, Haryana, Pin- 122015.
Writ Appeal No. 198 of 2021
Writ Appeal No. 199 of 2021
Page 2 of 29
12. Saktiman (Gromax) having its regd. office
at near Vishwamitri Railway over bridge,
Viswamitri, Vadodra, Gujrat, Pin- 399011.
........Respondents
WRIT APPEALNO.199 OF 2021
Arising out of W.P.(C) No. 8699/2019
Writ Appeal No.199 of 2021, Tractors and
Firm Equipment Ltd, a company duly registered
under the Companies act 1956 having its
registered office at 861, Anna Salai, Chennai,
PIN: 600002, rep. by its Vice President Mr. C.P.
Sounderarajan.
........Appellant
-Versus-
1. The State of Assam,
Represented by the Principal Secretary to the
Government of Assam, Agriculture Department,
Dispur, Guwahati-781006.
2. The Commissioner & Secretary to the
Government of Assam, Agriculture Department,
Dispur, Guwahati-781006.
3. The Director of Agriculture, Government of
Assam, Khanapara, Guwahati-781022.
4. The Chief Executive Officer, Mega Mission
Society, Chief Minister Samagra Gramya Unnayan
Yojna, Jaya Nagar, Khanapara, Guwahati-781022.
5. The Bid Evaluation Committee represented by
its Chairman cum Secy. to the Govt. of Assam
Agriculture Deptt. Dispur, Guwahati-781006.
Writ Appeal No. 198 of 2021
Writ Appeal No. 199 of 2021
6. M/S Escorts Ltd. having its regd. office at 15/5
Mathura Road, Faridabad, Haryana, Pin- 121003.
7. M/S Action Construction Pvt Ltd, having its
regd. office at Dudhola Link Road, Vill. Dudhola,
Dist. Palwal, Haryana, Pin- 121102.
8. M/S International Tractors Ltd (Sonalika)
having its regd. office at Vill. Chak Gurjaran, P.O.
Piplanwala, Jalandhar Road, Hoshiarpur.
9. M/S Mahindra and Mahindra Ltd., Swaraj
Division having its regd. office at Phase-IV,
Industrial Area Sas Nagar (Mohali), Punjab, Pin-
160055.
10. M/S Mahindra and Mahindra having its regd.
office at first floor Mahindra Towers Murli Road,
Kandivili (East), Mumbai, Pin- 400101.
11. M/S Case New Holland Industrial Pvt Ltd.
having its regd. office at Third Floor Plot no. 14
A, Sector 18 ATC Building, Maruti Industrial
Complex Gurugram, Haryana, Pin- 122015.
12.Saktiman (Gromax) having its regd. office at
near Vishwamitri Railway over bridge, Viswamitri,
Vadodra, Gujrat, Pin- 399011.
........Respondents
-BEFORE-
HON'BLE THE CHIEF JUSTICE MR. SUDHANSHU DHULIA
HON'BLE MR. JUSTICE SOUMITRA SAIKIA
Advocate for the appellants : Mr. K.N. Choudhury, Senior Advocate assisted by
Mr. J. Patowary, Advocate
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Writ Appeal No. 199 of 2021
Advocate for the respondents : 1. Mr. D. Saikia, Advocate General, Assam
2. Mr. B. Choudhury, Standing Counsel,
Agriculture Department.
JUDGMENT AND ORDER (CAV)
(Soumitra Saikia, J)
This Writ Appeal arises out of a common Judgment and
Order dated 01.06.2021 passed by the learned Single Judge
whereby the challenge made to the fresh financial price bids
called for by the respondents and the prayers for not giving effect
to the fresh financial bids submitted, were negated and the writ
petitions were dismissed.
2. Under the Chief Minister Samagra Gramya Unnayan Yojna,
Jaya Nagar, (CMSGUY) Khanapara, Guwahati scheme, it was
decided that Tractors and Matching Implements were to be supplied
in villages to members of the farming community across the State of
Assam through beneficiary groups. In pursuance to the said scheme,
by a Notice dated 04.02.2019, the Director of Agriculture,
Government of Assam invited competitive rates for Tractors and
Matching Implements from the manufacturers of tractors for phase-
II of the scheme for distribution of tractors unit under the Chief
Minister Samagra Gramya Unnayan Yojna, Jaya Nagar, Khanapara,
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Guwahati. By the NIT Bids were invited for supply of Tractors and
Matching Implements in the following categories:-
i) 35 PTO HP or more than 35 PTO HP and up to 40 PTO
HP.
ii) More than 40 PTO HP and up to 45 PTO HP.
iii) More than 45 PTO HP and 50 PTO HP.
3. Amongst the various conditions mentioned in the NIT the
the following conditions have relevance in the present
proceedings and are therefore extracted:-
"4. Most competitive rates offered by manufacturers in
each category of models mentioned above would be
selected and notified for procurement by the selected
beneficiary groups as per their choice. In a particular
category (Sl No.1), the most competitive rate offered by 50
(fifty) % of the technically responsive out of participating
manufacturers against the particular model shall be
selected.
5. The subsidy will be restricted to the L1 price quoted by
the responsive manufacturer in each category.
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6. The evaluation of the competitive price will be made
only on the basis of the rate quoted against each of the
make and model of a tractor by them manufacturer. In no
case, the rates quoted against the matching implements
will be loaded with the tractor for price evaluation.
11. The beneficiary group may procure the tractor of
selected model and make along with implements, if so
opted, from any authorized dealer of the manufacturer in
the state. The group may negotiate with the dealer to
bring rates below the price quoted by manufacturer ."
4. Pursuant to the Tender Evaluation Committee Meeting held
on 29.03.2019, the appellants and 6 (six) other bidders were
found to be technically responsive in the 3 (three) categories as
referred above. One of the bidder who was found to be
technically non- responsive had filed a writ petition before this
Court being WP (C) 2678/2019, which was disposed of vide order
dated 19.06.2019 directing the respondents to consider the bid
offered by the said bidder to be technically responsive and
thereafter consider its price bid along with other technically
responsive bidders.
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5. The Financial bids were opened on 06.07.2019 and the
appellants were found to be within the criteria specified. In terms
of the Clause 4 of the NIT dated 04.02.2019, 50% of the most
competitive rates offered against the particular model were to be
selected. Against the nine (9) qualified bidders, the appellant in
W.A. No. 198/2021 was the L-6 bidder in the category (i)- " 35
PTO HP or more than 35 PTO HP and up to 40 PTO HP"; L-8
Bidder in category (ii)- "more than 40 PTO HP and upto 45 PTO
HP" and L-5 Bidder in category (iii)- "More than 45 PTO HP and
50 PTO HP". The appellant in W.A No. 199/2021 was within the
50% technically qualified bidders as per Clause 4.
6. Thereafter, a cabinet decision was taken by the Government
in respect of the present Chief Minister Samagra Gramya Unnayan
Yojna, Jaya Nagar, Khanapara, Guwahati scheme regarding
distribution of Tractors and Matching Implements. The cabinet
meeting was held on 21.10.2019, whereby it was decided that since
the price bids were received more than 6 months ago and during
this period since the automobile sector experienced significant slump
in the demand leading to discounts/lowering of effective price in the
open market, in order that the benefit is passed on to the
farmers/beneficiaries and the Government, the Council of Ministers
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took a decision in the Cabinet to direct the Agricultural Department
to give opportunity to all technically qualified participating bidders to
lower their price bids and submit fresh financial bids within 15
(fifteen) days. Pursuant to the said cabinet decision the department
of Agriculture, Government of Assam invited fresh competitive rates
for Tractors and Matching Implements vide Notice dated
30.10.2019. The fresh financial bids were required to be submitted
on or before 15.11.2019 up to 1.00 p.m and the fresh financial bids
submitted will be opened on the same day at 2.00 p.m. All the
bidders, who were earlier selected, were permitted to submit fresh
financial bids. The appellants, however, did not submit any fresh
price bids but instead objected to the procedure adopted by the
State and filed their objections through their representation dated
14.11.2019. The appellants objected that after the Bids were
opened and the qualifiers were declared in each category alongwith
their prices offered were known, it was unfair to call for a re-bid as
the same might be construed to be done in order to accommodate
non-qualified manufacturers. The said representation was, however,
rejected by the authorities. The Evaluation Committee thereafter
held its meeting on 16.11.2019 as per clause 4 of the Notice and the
bids offered were evaluated as under:-
Category :- Equal or more than 35 up to 40 PTO HP
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Fresh
quoted
Name of price as on
Ranking Manufacturer Brand Model PTO HP 15.11.2019
L-1 M/S Skylight ACE 350 NG 37 381888.00
Automotive
Pvt. Ltd
L-2 M/s Sonalika DI-740 III 37.9 384000.00
International CM Series
Tractor
Limited
L-3 M/s Swaraj 843XM 38.9 426720.00
Mahindra &
Mahindra
Ltd. (FES)
Swaraj
M/s Gromax
Agri
Equipment
L-4 Ltd. Shaktimaan 45 DLX 39 459536.00
L-5 M/s Escorts Powerac 439 EI 38.5 465000.00
Ltd.
L-6 M/s CNH New 3230 38.2 468786.000
Industrial (I) Holland
Pvt. Ltd.
L-7 M/s Same DEUTZ 3040 E 35 469711.00
Deutz Fahr FAHR
India (P) Ltd.
L-8 M/s Tafe Eicher 368 USJ 35.8 470225.00
Motors and
Tractors Ltd.
L-9 M/s Tractors TAFE MF 1035 35.5 485000.00
and Farms DI
Equipment Mahashakti
Ltd. VI
L-10 M/s John John Deere 5042 DV3 497989.00
Deere India
Pvt. Ltd.
L-11 M/s Mahindra YOVO 415 35.6 516500.00
Mahindra DI
and
Mahindra
Ltd.
Category :- More than 40 up to 45 PTO HP
Fresh quoted
Name of price as on
Ranking Manufacturer Brand Model PTO HP 15.11.2019
L-1 M/s Sonalika DI-47 RX 43.2 445000.00
International international Heavy Duty
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Tractor
Limited
L-2 M/s Mahindra Swaraj 744 FE 41.2 478240.00
& Mahindra
Ltd. (FES)
Swaraj
L-3 M/s Tafe Eicher 485 41.6 500000.00
Motors & Hydromatic
Tractors Ltd.
L-4 M/s Escorts Farmtrac 45 F9 43.9 510000.00
Ltd.
L-5 M/s Mahindra Mahindra 575 DI MKM 40.07 513410.00
& Mahindra Bhumiputra DLX
Ltd.
L-6 M/s CNH New Holland 4710 A 42.23 516786.00
Industrial (I)
Pvt. Ltd.
L-7 M/s John John Deere 5050 D VS 43.2 521950.00
Deere India
Pvt. Ltd.
L-8 M/s Same DEUTZ Agromaxx 50 41.78 536000.00
Deutz Fahr FAHR
India (P) Ltd.
L-9 M/s Tractors TAFE MF-7250 DI 43.0 550000.00
and Farms
Equipment
Ltd.
Category :- More than 45 up to 50 PTO HP
Fresh quoted
Name of price as on
Ranking Manufacturer Brand Model PTO HP 15.11.2019
L-1 M/s Sonalika DI 750 III HDM 46.1 480000.00
International SI
Tractor
Limited
L-2 M/s Swaraj 855 FE 46.0 490560.00
Mahindra &
Mahindra
Ltd. (FES)
Swaraj
L-3 M/s Escorts Powertrac Euro 50 45.3 499000.00
Ltd
L-4 M/s Mahindra 555 DI Power + 48.0 530930.00
Mahindra &
Mahindra
L-5 M/s CNH New 3630 TX 46.0 548786.00
Industrial (I) Holland
Pvt. Ltd.
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L-6 M/s Tractors TAFE MF 5245 DI 46.6 575000.00
and Farms MAHAMAHAAN
Equipment
Ltd.
L=7 M/s John John Deere 5310 V3 49.6 603000.00
Deere India
Pvt. Ltd.
L-8 M/s Tafe Eicher 557 45.8 605000.00
Motors &
Tractors Ltd.
Accordingly, the Evaluation Committee recommended L-1 to
L-6 in the category 35-40 PTO HP, L-1 to L-5 in the category 40-
45 PTO HP and L-1 to L-4 in the category45-50 PTO HP to be
given the Letter of Award. Subsidy, however, was to be limited to
L-1 price in each category.
7. Being aggrieved the present appellants approached this
Court by filing WP (C) 8696/2019 and W.P(C) No. 8699/2019
respectively, challenging the evaluation as well as the award of
the contracts to the short listed bidders.
8. The learned Single Judge while issuing Notice vide order
dated 27.11.2019 permitted the State respondents to issue supply
orders leaving aside 5000 numbers of Tractors. The matters were
duly contested by the respondents by filing their counter and both
the writ petitions were heard together and vide impugned
Judgment and order dated 19.06.2019, the writ petitions were
dismissed. Although the learned Single Judge held that there was
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no enabling provision in the ITB of NIT dated 04.02.2019 for such
recalling of fresh competitive Price Bids after opening of the Price
Bids, it upheld such action of the State respondents that such
deviation was for a larger public interest. Aggrieved the present
Appeals have been filed.
9. The learned Senior counsel for the appellants, Mr. K. N.
Choudhury has strenuously urged that the impugned Judgment
and order passed by the learned Single Judge is contrary to the
law laid down by the Apex Court in matters of contract and
distribution of State Largesse and therefore erroneous and the
same should therefore be interfered with and set aside. Mr.
Choudhury, learned counsel further submits that the process by
which the bids were evaluated and the tenderers were selected and
the bidders were selected is also in complete violation to the CVC
guidelines and therefore, the evaluation of the NIT ought to have
been interfered with by the learned Single Judge and thereby the
writ petitions ought to have been allowed.
10. The manner in which the contract was awarded is totally
opposed to the settled principles in respect of the distribution of
state largesse. The learned Senior Counsel urged that once the
price bids are opened and the prices are known to all the bidders
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and the authorities concerned, calling for fresh financial bids
affects the sanctity of the entire bid process. The learned Senior
counsel contended that each of the bidders are within their rights
to quote the price which they deem it proper in response to the
NIT. It is contended that during the process of opening the price
bid as had been initially notified in the NIT and the evaluation
thereto, the present short-listed bidders were not even close to be
considered lowest bidders. The quoted bids of the appellants were
lower than the subsequently short listed bidders. However,
because of the process adopted by the State calling for fresh
financial bids to be submitted by all the 50% of the technically
responsive bidders, the bids submitted by the short-listed bidders
were subsequently found to be lower than the bids submitted by
the appellants and thereby they were considered to be bidders
eligible for the award of the contract. It is urged that because of
the unfair process adopted by the Government, bidders like
respondent No. 6, who were earlier nowhere within the 50%
technically responsive bidders with competitive rates, became L-5,
L-4 and L-3 respectively in categories (i), (ii) and (iii). The
appellants did not submit fresh financial bids and maintained the
price bids submitted by them earlier. It is urged that such
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procedure adopted by the State or its instrumentalities are
absolutely unfair and arbitrary and are therefore violative of
Article 14, besides being contrary to the CVC guidelines laid down.
The learned Senior counsel urged that merely because the State
has entered into commercial contract/transactions, the
requirement of fairness under Article 14 cannot be given a go-by
the State or its instrumentally as has been done during the tender
evaluation of the NIT in the present proceedings. The learned
Senior counsel urged that where there is an unfairness and
arbitrariness, its strikes at the root of Article 14 and such action is
required to be interfered with and set aside in judicial review
under Article 226 of the Constitution of India.
11. Per contra Mr. D. Saikia, learned Advocate General, Assam
has strongly objected to the contentions of the learned counsel
for the petitioner. The learned Advocate General, Assam, submits
that the whole scheme is for offering benefits to the farmers and
agriculturists in the rural area. The cabinet decision taken on
21.10.2019 is absolutely in public interest as public revenue is
involved. The learned Advocate General further submits that the
cabinet decision dated 21.10.2019 was never assailed by the
appellants and the calling of the fresh competitive prices by the
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petitioners are in pursuance to the said cabinet decision and
therefore, the same has been rightly upheld by the learned Single
Judge. The learned Advocate General submits further that as is
evident from the cabinet decision that pursuant to the opening of
the price bid initially, on 06.07.2019, the NIT could not be
processed because of the situation prevailing in the State due to
COVID-19 pandemic and various other connected reasons and
therefore admittedly there was a slump in the automobile
industry. The prices quoted by the bidders were pre-Covid prices
and, therefore, as per information available from the market
sources, the prices of the same models had gone down
substantially and therefore the cabinet had rightly taken a
decision in the interest of public policy to seek for revised price
bids from the intending tenderers. That apart, the learned
Advocate General, Assam, contended, that as per clause 11 of the
NIT it was still open for the beneficiary to negotiate the price with
the bidder subsequently. The learned Advocate General, Assam
further submitted that the present NIT pertains to the Chief
Minister Samagra Gramya Unnayan Yojna, Jaya Nagar, (CMSGUY)
Khanapara, Guwahati scheme. He submits that during the earlier
phase-I process, a similar situation had arisen, wherein the
appellants along with other tenderers were also intending bidders.
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The appellant was actually a beneficiary of such similar subsequent
call for price bid to which he did not object at the relevant point in
time rather he participated and was benefited accordingly.
Therefore, the writ petition filed before the learned Single Judge by
the present appellant is frivolous and lacks merit was rightly rejected
by the learned Single Judge. He submits that there is no infirmity in
the Judgment of the learned Single Judge and accordingly the
present writ appeal should be dismissed.
12. We have heard the learned counsels for the parties and we
have perused the pleadings on record. The impugned Judgment by
the learned Single Judge is also carefully perused.
13. From the facts extracted above, it is seen that pursuant to
the initial evaluation of bids held on 06.07.2019 the appellant in
W.A. No. 198/2021 was L-6, L-5 and L-8 in the categories (i) 35 -
40 PTO HP, (ii) 40-45 PTO HP and (iii) 45-50 PTO HP respectively.
And the Appellant in W.A. No. 199/2021 was within the most
competitive rates offered by 50% of the technically responsive
bidders as per clause 4 of the Notice. However, pursuant to the
fresh price bids offered in response to the Notice dated
30.10.2019 and the evaluation undertaken on 16.11.2019, the
appellants were pushed down the respective categories resulting
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in their ouster from the selection criteria on the basis of
competitive rates submitted afresh by their competitors. On the
contrary respondent no.6, who was not qualified under clause 4
prior to 30.10.2019 became L-5, L-4 and L-3 respectively in the
three categories respectively pursuant to the fresh price bids
submitted.
14. A careful perusal of the conditions of the NIT reveals that
out of the technically qualified bidders, only 50% would be
selected for offering the financial bids. There is no other provision
in the NIT which permits change and/or recalling of any prices
offered by the bidders. There is also no Clause prescribing for
negotiation by the Government with all the technically responsive
bidders after the price bids are opened. Although as per clause 11
of the NIT the beneficiary group is permitted to negotiate with the
dealer to bring down the rates below the price quoted by the
manufacturer, the said clause cannot be expanded to mean that
the Government can enter into negotiations with all the
technically responsive bidders after the price bids are opened. The
State, however, contends that offer of fresh competitive prices in
pursuance to the Cabinet decision was also invited from the
appellants, but however they did not choose to offer fresh Price
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Bids as had been offered by other bidders. The learned Single
Judge has accepted that there was no enabling provision in the
ITB to the NIT dated 04.02.2019 for calling of fresh competitive
bids after opening of the price bids, however, the learned Single
Judge has taken a view that such procedure was indeed
necessary for larger public interest in view of the fact that the
Tractors and Tractors and Matching Implements are required for
distribution to the rural public. The learned Single Judge arrived at a
conclusion that larger public interest justified the deviation made by
the State in calling for fresh competitive prices although not
provided for in the ITB to the NIT. It was held that the petitioners
(the appellants herein) had failed to discharge their burden to
disprove the fact of larger public interest being involved in such
deviations.
15. Judgments of the Apex Court rendered in-- Rammana
Dayaram Shetty Vs International Airport Authority of India & Ors
reported in (1979) 3 SCC 489, Jagdish Mandal -Vs- State of Orissa
&Ors reported in (2007) 14 SCC 517 and Central Coalfields Limited
& Anr-Vs- SLL-SML & Ors reported in (2016) 8 SCC 622, were relied
upon by the learned Single Judge to arrive at his conclusions. The
learned Single Judge concluded that there was indeed deviation and
that deviation was taken in larger public interest. Under such
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circumstances, the learned Single Judge declined to interfere with
the decisions taken and the award of the contracts made, in
exercise of powers of judicial review.
16. We have given our anxious thoughts to the issues raised in
the present appeal. Although there is no quarrel with the proposition
that the employer/the Government can deviate from the tender
conditions for larger public interest, however, such deviation is to be
scrutinized in each individual case to arrive at a finding, whether
such deviation was indeed necessary in the facts of the case. In the
facts of the present case, if the Government was of the view that
there was a substantial reduction in the prices of automobiles
because of the Covid pandemic situation, then it ought to have
either called for fresh bids and / or alternatively entered into
negotiations with only the lowest bidder. What was done instead by
the Government was that it permitted all the technically responsive
bidders to submit fresh competitive prices. It is apparent that upon
opening of the financial bids submitted earlier, the prices offered by
the bidders including the present appellants were disclosed to all the
participants. That enabled the Bidders who offered Fresh Bids to
offer more competitive Bids than what was offered earlier by them
and which bids were below the prices offered by the appellants.
Such procedure is alien to the process of evaluation of bids in an
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NIT initiated by the State, unless specifically provided for in the
terms of the NIT.
17. It is all too well settled that the State is under no compulsion
to enter into negotiation or enter into contract with any party in
respect of supply of any goods and services. However, it is also
widely accepted that to remove any arbitrariness and to make the
entire process transparent, invitation to bid or NIT is considered to
be the most widely accepted procedure to invite for supply of Goods
and Services by the State. However, where the State has called for
such NITs or tenders, with specific conditions laid down therein
with regard to the process of evaluation and settlement of such
tenders, it is required to adhere to the process published by which
it has invited bidders to offer their bids for supply of Goods and
Services. The Apex Court in Vice Chairman and Managing
Director, City and Industrial Development Corporation, of
Maharastra Ltd. And another Vs Shishir Realty Private Limited and
Others reported in 2021 SCC Online SC 1141, examined the Role
of constitutional Courts in reviewing tender process. The Apex
Court held that merely instilling an agency with discretion may not
be prohibited by the constitution, rather its unfettered use of such
discretion that is prohibited. The Apex Court held that while
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recognizing the existing principle of freedom to enter or not to
enter into contracts by the State and its instrumentalities, the
manner, method, and motive behind the aforesaid decision can be
subjected to the judicial review on the touchstone of equality,
fairness, proportionality and natural justice. The Apex Court held
that when a contract has been evaluated, the mere possibility of
more money in the public coffers, does not in itself serve public
interest. A blanket claim by the State claiming loss of public
money cannot be used to forgo contractual obligations, especially
when it is not based on any evidence or examination. The larger
public interest of upholding contracts and the fairness of public
authorities is also in play. Courts need to have a broader
understanding of public interest, while reviewing such contracts.
18. The Apex Court held that Governmental bodies being public
authorities are expected to uphold fairness, equality and Rule of
law even while dealing with contractual matters. It is a settled
principle that right to equality under Article 14 abhors
arbitrariness. Public authorities have to ensure that no bias,
favouritism or arbitrariness are shown during the bidding process.
A transparent bidding process is much favoured by this Court to
ensure that constitutional requirements are satisfied. Fairness and
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good faith stand ingrained in the contracts entered into by public
authorities' mandates such public authorities to conduct
themselves in a non-arbitrary manner during the performance
of their contractual obligations. The constitutional guarantee
against arbitrariness as provided under Article 14, demands the
State to act in a fair and reasonable manner unless public interest
demands otherwise. However, the degree of compromise of any
private legitimate interest must correspond proportionately to the
public interest, so claimed.
It was further held that merely by using grounds of public
interest or loss to the treasury, the successor public authority
cannot undo the work undertaken by the previous authority. Such
a claim must be proven using material facts, evidence and figures.
If it were otherwise, then there will remain no sanctity in the
words and undertaking of the Government. Businessmen will be
hesitant to enter Government contract or make any investment in
furtherance of the same. Such a practice is counter-productive to
the economy and the business environment in general.
19. In the facts of the present proceedings, the NIT issued was
a 2 (two) bids system comprising of technical bids and Financial
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bids. The terms of the NIT prescribed that 50% of the technically
qualified bidders would be called for offering their Financial bids.
The Financial bids were opened on 06.07.2019. All the bidders
who fulfilled the criteria would have a reasonable expectation of
being shortlisted as a successful bidder(s). The NIT Clause does
not provide for negotiations by the Government. However, there
is a provision for the beneficiary to negotiate with the dealer to
bring the rates below the price quoted by the manufacturer. In
view of the such specific Clauses available in the NIT, the decision
of the authorities to request for fresh price bids on the ground of
their being a slump in the automotive sector in view of the Covid
pandemic situation is not supported by the required facts and the
data in the pleadings filed. The Apex Court has succinctly held
that fairness and good faith which is ingrained in the contracts
entered into by public authorities demands that such public
authorities conduct themselves in a manner not arbitrary during
the performance of their contractual obligations. The deviation
resorted to by the respondents was alien to the tender process
initiated. Such deviations from the published tender conditions
without supporting materials for the reason therefore, has
violated the rights, the appellants to be considered in a fair and
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transparent manner. Such actions of the respondents will have to
be held to be arbitrary and therefore unsustainable.
20. In view of the all the above discussions, we do not agree
with the conclusions arrived at by the learned Single Judge that
public interest is the sole ground which will permit governmental
authorities to deviate from the tender clauses /conditions which
are published by such Government authorities, without sufficient
supporting data and materials.
21. Under the circumstances, we hold that the findings of the
learned Single Judge that the deviation in the NIT resorted to by
the State respondents was for larger public interest, which view
being opposed to the law laid down by the Apex Court cannot be
upheld and the same is accordingly interfered with. To that extent
we set aside the Judgment of the learned Single Judge.
22. Having held as such, it is also to be mentioned herein that
during the course of the arguments, upon specific instructions
received, the learned Advocate General, Assam has submitted
that during the pendency of the present proceedings, because of
change in the policy, the Government has decided not to make
any further supply of Tractors and Matching Implements under the
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Chief Minister Samagra Gramya Unnayan Yojna, Jaya Nagar,
(CMSGUY) Khanapara, Guwahati scheme, phase-II. The learned
Advocate General, State of Assam submits that in view of the
interim order dated 27.11.2019, whereby liberty was granted to the
State respondents to issue supply order, leaving aside a quantity of
5000 nos. of tractors; about 15,624 Tractors and Implements were
already supplied and 5000 nos. of Tractors were left to be supplied.
The learned Advocate General, Assam submits that there are 22,620
identifiable revenue villages, where the distribution of tractors was
required to be undertaken under the scheme. As on date a total of
15,624 numbers of tractors have already been distributed. Further
distribution of Tractors will not be made due to change in
Government Policy.
23. In view of such submissions, this Court directed the State to
bring such instructions by way of an affidavit. The affidavit was filed
on behalf of the respondent no.2 on 08.12.2021. The relevant
paragraphs of which are extracted below:-
"2. That the deponent begs to state that in the instant proceeding,
the Appellant has assailed the Common Judgment and Order dated
01.06.2021 passed in W.P.(c) no 8696/2019 and W.P.(c) 8699/2019,
whereby the Appellant challenge to Communication no
Agri/Engg/4772/CMSGUY-PhaseII/2018-19/339 dated 30.10.2019
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whereby fresh price bids from technically responsive bidder in
response to NIT dated 04.02.2019 under Phase IT of Chief Minister
Samagra Gramya Unnayan Yojana, were called for in respect of
approved tractor models and technically approved matching
implements was dismissed, by Ld Single Judge of this Hon'ble Court.
It is pertinent to state herein that in Phase I of Chief Minister
Samagra Gramya Unnayan Yojana also fresh price bids were called
for, wherein the Appellant participated and reaped the benefit of such
fresh price bid.
3. The Govt. of Assam launched a program for Farm Mechanization
under the Mission "Chief Minister Samagra Gramya Unnayan Yojana".
Under the said program one Tractor with matching implements is to
be provided to eligible selected group in each village at 70% Govt.
subsidy covering total 25,425 nos. of villages. Under the said program
the Department of Agriculture issued Notice no.
Agri/Engg/4632/CMSGUY/2017-18/66 dated 07.07.2017 under Phase I
and also Notice no Agri/Engg/4772/CMSGUY /2018-19/55 dated
04.02.2019, wherein all Manufacturers of Tractor and matching
implements (as per guidelines) registered on the Farmers' Portal
(http://farmer.gov.in) / Farm Mechanization and having presence in
the State with adequate service facilities were requested to give their
most competitive price for the scheme for the Tractors under 3
categories of horse power as mentioned therein with implements
having normal warranty period and most competitive price for
extended period upto 6 (six) years warranty
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4. That the deponent begs to file this affidavit to bring on record
certain facts and state that there are 22,620 identifiable revenue
village based on the guidelines approved by the Mega Mission Society-
Chief Minister Samagra Gramya Unnayan Yojana for distribution of
Tractors units scheme. Out of the identifiable revenue village, in total
under Phase I and Phase II, 15,624 numbers of tractors have been
distributed till date.
With regard, to distribution of tractors to the remaining 6996
numbers of revenue villages under the aforesaid scheme, the
deponent begs to state that as per communication no CEO/MMS-
CMSGUY/94/2017/222 dated 08.10.2021 issued by the Project Officer,
Mega Mission Society-Chief Minister Samagra Gremya Unnayan Yojana
there would be no further distribution of tractor under CMSGUY and if
required, t the same would be undertaken under Farm Machinery
Bank Scheme of Govt. of India and the Department of Agriculture may
provide assistance in this regard."
24. In the said affidavit filed by the respondent No. 2, it is stated
that there will be no further distribution of tractors under Chief
Minister Samagra Gramya Unnayan Yojna, Jaya Nagar, (CMSGUY)
Khanapara, Guwahati scheme and if required the same would be
undertaken under farm, machinery, bank scheme of the Government
of India, Department of Agriculture.
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25. In view of the above, we dispose of the writ appeals by
interfering with the findings arrived at in the impugned Judgment by
the learned Single Judge that the deviation in the NIT was for larger
public interest. In view of our such findings that the deviation in the
NIT resorted to by the State was arbitrary and therefore colourable,
the appellants are at liberty to pursue other legal remedies, before
any appropriate forum of law, if so advised. However, considering
the fact that the scheme has been abandoned after distribution of
15,624 tractors, it will not be proper for the Court to issue directions
to the State to permit distribution/supply of such Tractors and
Matching Implements by the appellants at this stage.
26. Writ appeal is accordingly disposed of in terms of the above
conditions.
27. No order as to cost.
JUDGE CHIEF JUSTICE
Comparing Assistant
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