TaxTMI 
TaxTMI 
2007 (2) TMI 582
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....asions but the tenders were cancelled. Finally, as per Notification dated 10.1.2005 fresh tenders were invited and pre bid meeting was held on 10.2.2005. Tenders were submitted, which were opened on 16.2.2005. In the tender documents four options were indicated. The individual extent of plots mentioned in option IV which was accepted by the GIDA was less than the ceiling limit contemplated under Section 82(d) of the Act i.e. 15 acres. Respondent No.1 i.e. M/s Hotel Venus International (hereinafter referred to as the 'Venus') was the successful bidder in respect of plot Nos. D3, D4 and D5 and its sister concerns were successful in respect of plots B, C3, C4 and C5 under Option IV. Appellant M/s Puravankara Projects Ltd. was the second highest bidder in respect of plot Nos. D3, D4 and D5 measuring about 8.78 acres each. In the pre bid meeting held on 10.2.2005 one of the queries raised by one of the participants was as to when exemption notification under Section 81(3)(b) of the Act would be obtained. The reply by the Secretary, GIDA forms the foundation of several stands in the present appeals. The Secretary admittedly replied as follows: "GIDA had moved for general exemption ....
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....5.2005 ratified the cancellation and directed forfeiture of the earnest money deposited in respect of the bids made by Venus in respect of the plots. In the said meeting in respect of plot Nos. D3, D4 and D5 it was resolved to accept the offers made by the appellant who had offered the same price as that offered by Venus earlier. The decision was however made subject to the decision of the High Court in the pending writ petitions. The Notification of exemption of land in terms of Section 81(3)(b) of the Act was issued and published in the official gazette on 20.5.2005. The learned Single Judge allowed the writ petition filed by Venus essentially holding that the exemption Notification should have preceded the tender and Venus could not have been expected to comply with tender conditions without an exemption Notification. The Writ Petitions filed by the appellants were dismissed. The writ appeals preferred in respect of the writ petitions were dismissed affirming the judgment of the learned Single Judge though on different grounds. It is to be noted that a Division Bench of the High Court had issued notice and passed interim order to maintain status quo in respect of the conce....
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.... of land, it was obvious that even if a bidder succeeds in the tender for more than 51 acres of land he cannot own or hold the land for any purpose without the exemption. Clause 14 of Tender Terms and Conditions provides that allottees can avail loan from the banks/financial institutions for effecting payment and for that purpose GIDA was requested to issue NOC. That being so, no any bank or financial institution will advance any amount without a clear title. In the absence of the exemption notification legally the successful bidder cannot hold any land. That actually would affect the generation of finances. In the pre bid meeting a specific stand was raised as to when the exemption notification is likely to be issued and the reply of GIDA authorities was that it was to be obtained shortly. In the absence of the exemption notification the requirement of furnishing the bank guarantee could not have been insisted upon and both the learned Single Judge and the Division Bench have therefore rightly held that the exemption notification was a condition precedent. If a bidder is constrained to fulfill the conditions regarding payment of bank guarantee without exemption that would cause....
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....0 days. On failure of compliance, the tender shall stand cancelled without further notice and the earnest money deposit shall be forfeited. If the tenderer to whom the notice intimating confirmation is sent, fails to respond within the specified time of 10 days, GIDA will be free to consider any other tender without any further notice. Xx xx xx 14. If after payment of 1^st installment, the allottee desires to avail loan from banks/financial institutions for paying the 2^nd and 3rd installments of sale value of the land, GIDA will issue necessary NOC favouring the bank/financial institution. 15. Sale deed will be registered and possession handed over to the purchaser on payment of the full value of the land". Sections 81(3)(b) and 87 on which much of the controversy revolves round read as follows: "81(3) The Government may, if they are satisfied that it is necessary to do so in the public interest. (a) xx xx xx xx (b) on account of any land being bona fide required for the purpose of conversion into plantation or for the extension or preservation of an existing plantation or for any commercial, industrial, education or charitable purpose, by notification in the ....
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.... Court also noted that both the Government and the GIDA were aware of the necessity of issuing a statutory notification in the gazette under Section 81(3)(b) of the Act failing which the entire contract would be rendered void and unworkable. Once the Government refuses exemption the entire contract would be frustrated, as also, the restrictions or conditions the Government may impose in a given case may not be acceptable to the parties. Disregard of statutory requirements may render the contract illegal and when the contract is entered into in violation of these statutory requirements it would be opposed to public policy and may violate Section 23 of the Indian Contract Act, 1872 (in short the 'Contract Act'). Therefore, it was held that notification under Section 81(3)(b) should have come before inviting the global tender so that the bidders were in a position to know the restrictions and conditions which Government would impose while granting exemption. That being so, learned Single Judge's view is affirmed by the Division Bench of the High Court. Clauses 10 and 15 in the tender document which have been extracted above are of considerable significance. Clause 10 provides th....
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....in respect of the required percentage of the bid amount and permits cancellation of the tender and forfeiture of the amount deposited. The High Court also has held that the exemption notification can be treated as part of implied terms. It is to be noted that the Government itself permitted GIDA to sell the property initially. Section 23 of the Contract Act has really no application to the facts of the case. Section 87 as noted above, deals with acquisition after the date of notification and permits filing of the statement subsequently in terms of Sub-section (1A) of Section 87. Illegality is attached to a case where a person continues to hold the land and there is a requirement of surrender after acquisition. There is a vital distinction between the administrative and contractual law decisions. It is to be noted that there was no privity of contract between Government and the bidders. The tender conditions inter alia contained provisions relating to signing of contract and payment of money. There can be no implied terms so far as the Government is concerned. Terms can be claimed to be implied by the parties to the contract. Thus, it was open to the contracting parties to ....
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....les, it has to be done strictly in compliance with the rules. We have, therefore, no hesitation in concluding that adherence to the ITB or rules is the best principle to be followed, which is also in the best public interest. 30. Though clause 29 in this case appears to be similarly worded as in the bid documents in Spina case a close reading of these clauses shows that no power of waiver is reserved in the case on hand. That apart, the nature of the error in these two cases is entirely different. There, the error was apparent $ 400 for $ 4, non-material and waivable by the Corporation; in the present case the errors pointed out above are not simply arithmetical and clerical mistake but a deliberate mode of splitting the bid which would amount to rewriting the entries in the bid document and cannot be treated as non-material. Therefore, the judgment in Spina case does not help Respondents 1 to 4. 31. The submissions that remains to be considered is that as the price bid of respondents 1 to 4 is lesser by 40 crores and 80 crores than that of respondents 11 and 10 respectively, public interest demands that the bid of respondents 1 to 4 should be considered. The Project un....
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....urt does not sit as a court of appeal but merely reviews the manner in which the decision was made. (3) The court does not have the expertise to correct the administrative decision. If a review of the administrative decision is permitted it will be substituting its own decision, without the necessary expertise which itself may be fallible. (4) The terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to tender is in the realm of contract. Normally speaking, the decision to accept the tender or award the contract is reached by process of negotiations through several tiers. More often than not, such decisions are made qualitatively by experts. (5) The Government must have freedom of contract. In other words, a fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasi-administrative sphere. However the decision must not only be tested by the application of Wednesbury principle of reasonableness (including its other facts pointed out above) but must be free from arbitrariness not affected by bias or actuated by mala fides. (6) Quashing decisions may impose heavy ad....
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....auctions did so with knowledge of the terms and conditions attaching to the auctions and they cannot, by their writ petitions, be permitted to wriggle out of the contractual obligations arising out of the acceptance of their bids. This objection is wellfounded and must be accepted. 16. Those interested in running the country liquor vends offered their voluntarily in the auctions held for granting licences for the sale of country liquor. The terms and conditions of auctions were announced before the auctions were held and the bidders participated in the auction without a demur and with full knowledge of the commitments which the bids involved. The announcement of conditions governing the auctions were in the nature of an invitation to an offer to those who were interested in the sale of country liquor. The bids given in the auctions were offers made by prospective vendors to the Government. The Government's acceptance of those bids was the acceptance of willing offers made to it. On such acceptance, the contract between the bidders and the Government became concluded and a binding agreement came into existence between them. The suc....
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....reach of contract by the appellant-Corporation is damages for the notice period of 30 days and no more. It was then urged that the reasons given in the award for granting the relief of restoration of the distributorship are untenable, being contrary to law. Shri Salve contended that the propositions of law indicated in the award and applied for granting the reliefs disclose an error of law apparent on the face of the award. It was also urged that the onus of proving valid termination of the contract was wrongly placed by the arbitrator on the appellant-Corporation instead of requiring the plaintiff-respondent 1 to prove that the termination was invalid. It was also contended that the failure of the arbitrator to consider and decide the appellant-Corporation's counter-claim when the whole suit was referred for decision constitute legal misconduct. 10. In reply, Shri Sehgal on behalf of respondent 1 contended that there is a presumption of validity of award and the objections not taken specifically must be ignored. This argument of Shri Sehgal relates to the grievance of the appellant relating to placing the onus on the appellant-Corporation of provi....
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....ves Co. and Ors. v. State of Bihar and Ors. (1981 (1) SCC 537) it was observed at para 48 as follows: "48. It is a fundamental principle of general application that if a person of his own accord, accepts a contract on certain terms and works out the contract, he cannot be allowed to adhere to and abide by some of the terms of the contract which proved advantageous to him and repudiate the other terms of the same contract which might be disadvantageous to him. The maxim is qui approbat non reprobate (one who approbates cannot reprobate). This principle, though originally borrowed from Scots Law, is now firmly embodied in English Common Law. According to it, a party to an instrument or transaction cannot take advantage of one part of a document or transaction and reject the rest. That is to say, no party can accept and reject the same instrument or transaction (Per Scrutton, L.J., Verschures Creameries Ltd. v. Hull @ Netherlands Steamship Co. (1921 (2) KB 608; see Douglas Menzies v. Umphelby (1908 AC 224, 232; see also Stround's Judicial Dictionary, Vol. I, page 169, 3rd Edn.)" In Assistant Excise Commissioner and Ors. v. Isaac Peter and Ors. (1994 (4) SCC 104) this Court highl....
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....of implied terms tend to be based on convention rather than logic. The conventional distinction which will be adopted here, are as follows: (1) terms implied by custom; (2) terms implied by law; (3) other terms implied by the courts. The relationship between the parties may be a matter of profound importance in determining whether a contract contains a term implied under one of these heads. xx xx xx xx Implication by law- There are many cases where apart from local custom or usage, the common law has recognized a general custom that certain terms be incorporated into particular types of contract. In some of these cases, the rules having been decided by the courts, they have been put into statutory form; for example the implied terms in sale of goods, conveyances of interests in land, in contracts of marine insurance or in contractual licences to enter property. Frequently, such statutorily implied terms are expressed to give way to a contrary intention; but there are other cases where the terms implied by statute cannot be excluded by any contrary agreement. Yet a further step in the process is that where statute law has in a particular field codified terms implied a....