M.L.Sudharshan Rao v. Cantonment Board

Order

This writ petition has been instituted to declare the action of the respondent-Cantonment Board, Secunderabad in canceling tender notification dated 16-02-2008 and issuing a re-tender notification dated 10-03-2008, as illegal. The 1st respondent-Cantonment Board has issued a tender notification on 16-02-2008 for grant of leasehold rights for collection of OCTRAI and TOLL tax for the period from 01-04-2008 to 31-03-

2009. The last date for submission of the tenders was set at 05-03-2008 till 16-00 hours and they were to be opened on the same day at 16-50 hours. The Cantonment Board had, accordingly, opened the bids for collection of OCTRAI and found that, of the four

bids received, the bid of Sri E.Rajagopala Reddy to be the highest for Rs.12,02,34,500/-. The next highest is made by M/s Siva Sai Enterprises Rs.8,64,99,000/-. Similarly, when it opened the bids for collection of TOLL tax, the bid of Sri E.Rajagopala Reddy was the highest at Rs.8,02,34,500/- and the next highest bid is that of Sri K.Sreedhar Reddy of M/s Siva Parvathi Enterprises for Rs.5,12,00,000/-. But however, the 1st respondent – Cantonment Board has noticed infirmities committed by Sri E.Rajagopala Reddy; the first being - as against the requirement of purchasing the tender schedules in his name, he has used the tender schedule purchased by Sri M. Edwin Anthony and the second infirmity was that he has not deposited the required security deposit along with his bid. It will be appropriate to notice that the petitioner herein has not submitted his bid for the right to collect the OCTRAI, but he has participated by offering his bid to collect the TOLL tax and his bid was for Rs.3,87,69399/-, which is the lowest offer made by the six bidders for collection of TOLL tax. The default of Sri E.Rajagopala Reddy did not present much difficulty for the Cantonment Board to reject and not consider his bid, but however, what, obviously, troubled the Cantonment Board was the steep variation between the offers made by the highest bidder and the next highest bidder. Therefore, the matter has been placed for consideration of the Cantonment Board, which, on 10-03-2008 decided to cancel the notification issued on 16-02-2008 and to re-notify again. Accordingly, a re-notification was issued on 10-03-2008. This gave raise to the present writ petition. The learned counsel for the petitioner Sri N.Siva Reddy would submit that the decision of the Cantonment Board to cancel the tender notification dated 16-02-2008 is taken for totally extraneous reasons and considerations and it is not based upon valid or fair reasons. He would further contend that the decision of the Cantonment Board is taken to cancel the notification dated 16-02-2008, only with a view to provide an opportunity to Sri E. Rajagopala Reddy to rectify the defects found and noticed in his bid opened on 05-03-2008 and that any such attempt to bring him back into contention is liable to be described as an act of conferring favour on the said individual and consequently liable to be interfere with. Sri Deepak Bhattacharjee learned Standing Counsel for the Cantonment Board would submit that the 1st respondent – Cantonment Board is not at all interested in providing any further opportunity to Sri E.Rajagopala Reddy, who committed irregularities while submitting his bid in response to the notification dated 16-02-2008 and on the other hand the exercise of cancellation has been prompted by the solitary consideration of securing the highest bid so that the fiscal interests of the Board can be preserved and protected. The learned Standing Counsel would further submit Cantonment Board has, in fact, been contemplating to take appropriate action against Sri E.Rajagopala Reddy for the default and irregularities committed by him, which forced the tender notification dated 16-02- 2008 to be cancelled. He would further submit that while inviting the tender notification dated 16-02-2008, the Board has made the position very clear to every bidder that the respondent – Cantonment Board has reserved the right to accept or reject any bid or cancel the entire process of tenders itself. Since, the decision to cancel the tender notification dated 16-02- 2008 has been prompted by the solitary consideration of the interests of the Revenue of the Board, the decision to cancel the notification dated 16-02-2008 and the decision to re-notify the same on 10-03-2008, should not be faulted with. This apart, the learned Standing Counsel would also submit that, in fact, pursuant to the re-tender notification dated 10-03- 2008, a competitive bid took place and consequently the interests of the Board have been well taken care of. The learned Standing Counsel had also placed reliance upon a judgment rendered by the Supreme Court in MAHARASHTRA HOUSING AND AREA DEVELOPMENT AUTHORITY AND ANOTHER v. RAHUL KUMAR AND ANOTHER [1] , and would contend that the tender notification being a mere invitation, does not confer any right on the bidders, much less, highest bidder, to force the respondent – Cantonment Board to accept the bids submitted in furtherance of its notification dated 16-02-2008. While it is true that a tender notification is a mere invitation or offer for the prospective contractors to participate in the bidding process, but at the same time, no such process can be cancelled for whimsical or unjust reasons. It is one thing to say that a tender notification per se does not confer any right on any prospective bidder and it is altogether a different thing to cancel the entire process. So long as the process of cancellation of the tenders is based upon valid considerations and reasons and it had not been merely resorted for the purpose of providing an opportunity for a defaulting party to rectify his defects, there may not be anything wrong in such an exercise. For instance, if cancellation of tender process is resorted to with a view to provide a fresh opportunity to Sri E.Rajagopala Reddy to come back and get into reckoning, then, perhaps, the decision to cancel the tender notification dated 16-02-2008 could have been faulted with as it might amount to conferring a favour upon such a defaulting party. But however, if the decision to cancel a tender process is based upon such valid criteria, as is sought to be made out in the instant case, then, perhaps, no exception can be called for. It is by now a fairly well settled principle of law that the tender notification is a mere document of offer and does not confer any right, whatsoever, upon the bidder. So long as the decision making process to cancel such a tender notification is fair and transparent and the decision to cancel the tender process itself is based on valid criteria, such as to preserve the fiscal interests of the Cantonment Board, then, it does not call for any exception. I, therefore, do not find any merit in the contention of the learned counsel for the petitioner that the cancellation of the tender notification dated 16-02-2008 has been resorted to by the Cantonment Board only for the purpose of providing an opportunity to the defaulting party, namely, Sri E.Rajagopala Reddy. This apart, the writ petitioner is the lowest offerer for the right to collect the TOLL tax amongst six bidders, therefore, he does not stand any chance, whatsoever, even if the tenders were to be finalized without being cancelled. Thus, looked at it from any angle, there are not merits in the claim of the writ petitioner. Further, pursuant to the re-notification dated 10-03-2008, when the bids were opened on 24-03-2008, Sri E. Rajagopala Reddy did not participate and the other bidders have given competitive bids, which are certainly encouraging in comparison to those that were offered pursuant to the notification dated 16-02-2008. For all these reasons, I do not find any merit in the writ petition and accordingly, the same is dismissed without costs. -------------------------------- Nooty Ramamohana Rao, J Knk/mrk 18th April 2008 ..... REGISTRAR // TRUE COPY // SECTION OFFICER To 1.2CCs to 2.2CD copies Form-NIC-OGS/WP{TRK} [1] 2001 (8) SUPREME 640.