TaxTMI 
TaxTMI 
2004 (5) TMI 602
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.... For the said purpose it issued a Notice Inviting Tender (NIT) from interested persons for operating the said weigh bridge. Pursuant to the said notification number of tenderers offered their bids. On 11.2.2002, the respondent-State accepted the bid of one Smt. Nila Niangti, respondent No.5 herein, which was for a sum of Rs. 1.21 crores and the contract was settled in her favour. One of the bidders who participated in the said tender challenged the said acceptance of the bid before the High Court in W.P. No.34(SH) of 2002, inter alia, on the ground that the said acceptance was contrary to the prescribed guidelines and the bid amount accepted was speculatory and predatory in nature. The learned Single Judge who heard the said writ petition accepted the contention of the writ petitioner that the bid offered by the 5th respondent herein was speculatory and predatory in nature. According to the learned Judge the approximate value of the contract would have been only Rs. 40,29,600/-which figure the learned Judge arrived at by taking into consideration a report submitted by the enforcement staff of the Department of Transport. On the said basis while setting aside the acceptance of the b....
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....e tender regulation. However, the Minister disagreed with the recommendations made by the Tender Committee solely on the ground that the High Court as per its order dated 15.3.2002 had directed the respondent-State to take into consideration the report submitted by the Enforcement Inspector of the Department of Motor Vehicles as regards the average number of trucks loaded and unloaded plying from Jaintia Hills to Guwahati and vice-versa per day while making the re-tender, hence, any deviation from the above direction would amount to contempt of court and it would be contrary to the mandate of the said judgment to rely on any other source of information like the data supplied by the Public Works Department while making an assessment of the value of the tender. Therefore, he recommended that the tender of one of the persons amongst respondents 4, 5 and 6 who had offered Rs. 40,29,600/- be accepted. 6. In view of the difference of opinion between the Tender Committee and the Minister, the matter was referred to the Chief Secretary, the Finance Department and the Law Department who were all of the opinion that the matter should be referred to the High Court as to whether the valuation....
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....ground that the said respondent had proved his financial capacity while the other two equivalent bidders had not done so. 10. Being aggrieved by the aforementioned order granting the lease in favour of the 4th respondent the other 2 tenderers who had offered identical amounts preferred two writ petitions before the said High Court. The main contention of the writ petitioners in the said petitions was that the acceptance of the bid of the 4th respondent which was identical with theirs solely on the ground of financial capacity was contrary to the guidelines. 11. Learned Single Judge by his judgment dated 7.11.2002 dismissed the said writ petition. The court held that the decision of the authorities to choose the 4th respondent on the ground that financial soundness is a relevant consideration for the purpose of assessing suitability of a tenderer for the settlement of the contract. 12. At this stage the appellant who had bid for Rs. 62,70,797/- having come to know of the acceptance of the lesser bid of the 4th respondent filed a writ appeal against the judgment of the learned Single Judge dated 7.11.2002 whereby he had approved the acceptance of the offer of 4th respondent. It wa....
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....ed even otherwise from the material on record the Tender acceptance Committee was justified in coming to the conclusion that the value of the tender would be as much as Rs. 2 crores. In such a situation the respondent-State could not have fixed the value of tender at Rs. 40,29,600/- merely because the High Court in the earlier judgment considered the said value as reasonable value. It is the submission of the learned counsel that fixation of value of the contract is within the jurisdiction of the authorities concerned and the court ought not to have embarked upon the exercise of this nature with the limited material available to it. He also submitted that the Minster was wholly wrong in coming to the conclusion that the Government was bound by the figure of Rs. 40,29,600/- merely because it was the opinion expressed by the court. 14. Mr. Vijay Hansaria, learned senior counsel appearing for the 4th respondent firstly contended that the appellant's appeal before the Division Bench was not maintainable inasmuch as he had not challenged the order of acceptance of the 4th respondent's bid by filing a writ petition and it is only when the writ petitions filed by 2 other bidders ....
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....f litigation by the learned Single Judge, he approached the Appellate Bench of the High Court because rejection of his bid in preference to the bid of the 4th respondent was arbitrary and contrary to law. The Appellate Bench of the High Court has thought it fit to entertain the appeal of the appellant by rejecting the objections raised by the 4th respondent and the State. We find no reason to interfere with this finding as to the maintainability of the appeal because if really the bid of the appellant was rejected erroneously and the appellant had no knowledge of such acceptance or rejection, the appellant has every right to challenge the said rejection of his bid and also the acceptance of the 4th respondent's bid. And if it is a fact, which we think it is, that the appellant had no knowledge of the same till the disposal of the writ petitions of other two bidders, the appellant was justified in filing the appeal against that judgment because filing of another writ petition would only be an exercise in futility. 16. The next question for our consideration is : whether the value of the contract fixed at Rs. 40,29,600/- by the High Court as per its order dated 15.3.2002 was a f....
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....hat the Tender Acceptance Committee had the necessary authority to re-assess the value of the tender which it did by fixing the value at Rs. 2 crores. This value was fixed after taking into consideration the report submitted by the Enforcement Inspectors as also the report and data supplied by the PWD and if the said authorities thought it fit and safe to rely upon the data supplied by the PWD authorities we can find no fault with the same. In this context in our opinion, the Minister who disagreed with the recommendation of the Tender Acceptance Committee was in error in coming to the conclusion that the figure of Rs. 40,29,600/- fixed by the learned Single Judge in his order was a final value and the State Authorities had no right to differ from the same. 18. The next question for our consideration is : does the principle of predatory pricing apply to the contract of the like involved in this appeal ? The learned Single Judge who applied this principle had obviously in mind the law laid down by this Court in the case of Union of India and Ors. vs. Hindustan Development Corporation and Ors. AIR1994SC988 wherein this court did discuss the principle of predatory pricing in the cont....
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....ng the price may cause loss to public at large. This is not a contract which would have any effect on the price of coal, since weighment charges are fixed by the Government and the contractor has no right to increase the same. Payment of bid amount is purely a matter between the contractor and the State. As a matter of fact obtaining higher revenue by accepting the eligible highest bid would only be in public interest because State stands to gain more revenue. The offering of the bid after knowing the commercial value of the contract is a matter left to the business acumen or prudence of the tenderer. No third party's interest is involved in such contract. Therefore, in our opinion, application of principle of predatory pricing is wholly alien to this type of contract. Mere offer of a fancy or high bid by itself does not make the bid a predatory bid in this type of contract. If the State decides to give its largesse to public it has an obligation to see that it fetches the best possible value for the same, provided otherwise it does not in any manner affects the rights of other citizens. No bidder has any right in law to demand the State to give away its largesse for an amount ....