Full Judgment Text
JUDGMENT REPORTED JUDGMENT JUDGMENT REPORTED REPORTED
IN THE HIGH COURT OF JUDICATURE AT BOMBAY, IN IN THE HIGH COURT OF JUDICATURE AT BOMBAY, THE HIGH COURT OF JUDICATURE AT BOMBAY,
AURANGABAD BENCH, AT AURANGABAD. AURANGABAD AURANGABAD BENCH, AT AURANGABAD. BENCH, AT AURANGABAD.
WRIT PETITION NO. 9 OF 2009 WRIT WRIT PETITION NO. 9 OF 2009 PETITION NO. 9 OF 2009
Mahendra s/o. Hiraman Mallav,
Age : 37 years,
Occupation : Business,
R/o. at post Shirur,
Taluka : Shirur,
District : Pune. .. Petitioner
versus
1. The State of Maharashtra,
Through its Principal Secretary,
Government of Maharashtra,
Animal Husbandry, Dairy Development
And Fisheries Department,
Mantralaya,
Mumbai - 32.
2. The Commissioner for Fisheries,
Maharashtra State,
Taraporewala Aquarium,
Netaji Subhash Road,
Mumbai.
3. The Assistant Commissioner
for Fisheries or Member-
Secretary, Purchase Committee
Of Marathwada Package,
Department of Fisheries,
Taraporewala Aquarium,
Netaji Subhash Road,
Mumbai.
4. M/s. Kishanlal Gahiram & Company,
Through its Proprietor,
Kishanlal s/o. Gahiram Lalwani,
Dana Bazar, Yeotmal,
Taluka and District : Yeotmal.
5. M/s. Sun Enterprises,
Through its Proprietor,
Suresh s/o. Madhav Samag,
S.B. Colony, Aurangpura,
Aurangabad,
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Taluka and District : Aurangabad.
6. Raviseth Dagadu Patil, .. Respondent .. .. Respondent Respondent
Honourable Minister for Animal no.6 deleted. no.6 no.6 deleted. deleted.
Husbandry And Dairy Development
Department, 4th Floor,
Mantralaya, Mumbai - 32.
7. Gorekh Govind Megh,
Yeshodhan Building,
2nd Floor, Opp : ICC Club House,
Near Mantralaya,
Mumbai - 32. .. Respondents.
--------
Mr. A.N. Kakade, Advocate, for the
petitioner.
Mr. R.N. Dhorde, Special Counsel,
with Mrs. R.D. Reddy, Assistant
Government Pleader, for
respondent nos.1, 2 and 3.
Mr. Rajendra Deshmukh, Advocate, for
respondent nos.4 and 5.
Mr. V.D. Hon, Advocate, for respondent
no.6 (Respondent no.6 is deleted)
Mr. P.M. Shah, Senior Advocate, with
Mr. Swapnil Joshi, Advocate, for
respondent no.7.
--------
I T H
W I T H I T H
WRIT PETITION NO. 450 OF 2009 WRIT WRIT PETITION NO. 450 OF 2009 PETITION NO. 450 OF 2009
M/s. Sahyadri Outdoors,
Through its Partner,
Yeshwant s/o. Baburao Nikam,
Age : 48 years,
Occupation : Business,
R/o. 3, Gangadhar Apartment,
586, Narayan Peth, Pune,
District : Pune. .. Petitioner.
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versus
1. The State of Maharashtra,
Through its Principal Secretary,
Government of Maharashtra,
Animal Husbandry, Dairy Development
And Fisheries Department,
Mantralaya,
Mumbai - 32.
2. The Commissioner for Fisheries,
Maharashtra State,
Taraporewala Aquarium,
Netaji Subhash Road,
Mumbai.
3. The Assistant Commissioner
for Fisheries or Member-
Secretary, Purchase Committee
of Marathwada Package,
Department of Fisheries
Taraporewala Aquarium,
Netaji Subhash Road,
Mumbai.
4. M/s. Kishanlal Gahiram & Company,
Through its Proprietor,
Kishanlal Gahiram Lalwani,
Dana Bazar,
Taluka and District : Yeotmal.
5. M/s. Sun Enterprises,
Through its Proprietor,
Suresh Madhav Samag,
S.B. Colony, Aurangpura,
District : Aurangabad.
6. Raviseth Dagadu Patil, .. Respondent .. .. Respondent Respondent
Honourable Minister for deleted.
no.6 deleted. no.6 no.6 deleted.
Animal Husbandry and
Dairy Development Department,
4th Floor, Mantralaya,
Mumbai - 32.
7. Gorekh Govind Megh,
Yeshodhan Building,
2nd Floor, Opp : ICC Club House,
Near Mantralaya,
Mumbai - 32. .. Respondents.
----------
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Mr. A.N. Kakade, Advocate, for the
petitioner.
Mr. R.N. Dhorde, Special Counsel,
with Mrs. R.D. Reddy, Assistant Government
Pleader, for respondent nos.1, 2 and 3.
Mr. Rajendra Deshmukh, Advocate, for
respondent nos.4 and 5.
Mr. V.D. Hon, Advocate, for respondent
no.6 (Respondent no.6 is deleted).
Mr. P.M. Shah, Senior Advocate, with
Mr. Swapnil Joshi, Advocate, for
respondent no.7.
----------
W I T H I T H I T H
WRIT PETITION NO. 1058 OF 2009 WRIT WRIT PETITION NO. 1058 OF 2009 PETITION NO. 1058 OF 2009
M/s. Deshmukh Fish-Feed Agency,
Ambhai, Taluka : Sillod,
District : Aurangabad, through
Its Proprietor Ejaj Asmat Deshmukh,
Age : 48 years,
Occupation : Business,
R/o. Ambhai, Taluka : Sillod,
District : Aurangabad. .. Petitioner.
versus
1. The State of Maharashtra,
Through its Principal Secretary,
Government of Maharashtra,
Animal Husbandry, Dairy Development
and Fisheries Department,
Mantralaya,
Mumbai - 32.
2. The Commissioner for Fisheries,
Maharashtra State, Taraporewala
Aquarium, Netaji Subhash Road,
Mumbai.
3. The Assistant Commissioner
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for Fisheries or Member-
Secretary, Purchase Committee
of Marathwada Package,
Department of Fisheries,
Taraporewala Aquarium,
Netaji Subhash Road,
Mumbai.
4. The Regional Deputy Commissioner,
Fisheries, Aurangabad Division,
Aurangabad.
5. M/s. Maniram Enterprises,
Row Houses No. B-66,
Sector No.4, Airoli,
Navi Mumbai - 400 708,
Through its sole proprietor,
Dinesh s/o. Bapurao Deshmukh,
Age : 42 years,
Occupation : Business,
R/o. 1004, Nilambari Cooperative
Housing Society Ltd.,
Plot No.1, Sector-19,
Airoli, New Mumbai - 78.
6. Raviseth Dagadu Patil, .. Respondent .. .. Respondent Respondent
Honourable Minister for Animal no.6 deleted. no.6 no.6 deleted. deleted.
Husbandry and Dairy Development
Department, 4th Floor,
Mantralaya, Mumbai - 32.
7. Gorekh Megh,
Yeshodhan Building,
2nd Floor, Opp : ICC Club House,
Near Mantralaya, Mumbai - 32. .. Respondents.
-----------
Mr. A.N. Kakade, Advocate, for the
petitioner.
Mr. R.N. Dhorde, Special Counsel,
with Mrs. R.D. Reddy, Assistant Government
Pleader, for respondent nos.1 to 4.
Mr. Rajendra Deshmukh, Advocate, for
respondent no.5.
Mr. V.D. Hon, Advocate, for respondent
no.6 (Respondent no.6 is deleted).
Mr. P.M. Shah, Senior Advocate, with
Mr. Swapnil Joshi, Advocate, for
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respondent no.7.
*
CORAM : Smt. NISHITA MHATRE CORAM CORAM : Smt. NISHITA MHATRE : Smt. NISHITA MHATRE
&
B.R. GAVAI, JJ B.R. B.R. GAVAI, JJ. GAVAI, JJ
DATE : 5TH MARCH 2009 DATE DATE : 5TH MARCH 2009 : 5TH MARCH 2009
JUDGMENT (Per B.R. GAVAI, J.) : JUDGMENT JUDGMENT (Per B.R. GAVAI, J.) : (Per B.R. GAVAI, J.) :
1. Rule. Rule made returnable forthwith,
by consent.
2. On an application made by the learned
Advocate for the petitioners, he is permitted to
delete respondent no.6 in all the three petitions,
from the array of the respondents.
3. All these three petitions have been
filed by the petitioners, thereby challenging the
action on the part of the respondent, State of
Maharashtra, in cancelling the allotment of work of
supply of prawn seeds and fish fingerlings, which was
allotted to them by the Assistant Commissioner of
Fisheries, Mumbai, vide letter dated 11th November
2008, and the letter dated 3rd December 2008 vide
which the respondent no.1 i.e. Principal Secretary,
Government of Maharashtra, Animal Husbandry, Dairy
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Development & Fisheries Department, Mumbai, directed
the respondent no.2 i.e. Commissioner of Fisheries,
Mumbai, to allot the said work to respondent no.4 in
Writ Petition No. 9/2009, respondent nos.4 and 5 in
Writ Petition No. 450/2009 and respondent no.5 in
Writ Petition No. 1058/2009.
4. Since the factual position as well as
the legal position is identical in all the three
petitions, the said petitions were heard together and
are being decided by the common judgment and order.
5. The facts, in nutshell, giving rise to
the present petitions are as under :-
(a) (a) (a) The respondents authorities are hereinafter
referred to as they are arrayed in Writ Petition No.
9/2009.
(b) (b) (b) The respondent no.2, Commissioner of Fisheries,
Maharashtra State, had issued a tender notice wherein
tenders were invited for the work of supply of
procurement of prawn seeds, hatcheries prawn seeds and
fish fingerlings. The tender notice was issued on 8th
October 2008. In response to the tender notice, in
all, 18 persons including the petitioners and the
respondents who have been allotted the work, by the
impugned order, had submitted their bids.
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(c) (c) (c) The tenders were opened before the Committee
which consisted of various experts under the
Chairmanship of respondent no.2 Commissioner of
Fisheries, on 10th November 2008. Since the bids of
the petitioners were found to be lowest, the
respondent no.3 i.e. Assistant Commissioner of
Fisheries, Mumbai, vide communication dated 11th
November 2008, informed the petitioners that since
their offer was lowest, the same was accepted.
However, thereafter the respondent no.1 had stayed the
process of allotment of work to the petitioners and
subsequently issued an order dated 3rd December 2008,
thereby awarding the aforesaid work to various
respondents mentioned herein above. Being aggrieved
by the said action on the part of the respondent no.1,
the petitioners have filed the present petitions.
6. We have heard the learned Counsel
appearing for the petitioners, as well as, the learned
Assistant Government Pleader and learned Counsel
appearing for the respective respondents. We have
also perused the original record of the respondent
no.1 State and of the Purchase Committee.
7. Mr. N.K. Kakade, learned Counsel
appearing for the petitioners, submits that as per the
Government Resolution dated 15th September 2008, it is
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the Committee under the chairmanship of the
Commissioner of Fisheries, which was constituted as
per the resolution, which is entrusted with the work
of allotment of work for procurement of prawn seeds
and fish fingerlings. He submits that in accordance
with the said resolution, the Committee consisting of
seven senior officers having expertise in the field,
had completed the process for selection of successful
bidders. It is submitted that the Committee after
finding the petitioners to be eligible and lowest, had
decided to allot the said work to the petitioners. He
submits that the the respondent, State of Maharashtra,
had no business to interfere with the decision taken
by the Committee.
8. The learned Counsel appearing for the
petitioners further submits that the respondent no.7
in Writ Petition No. 9/2009, who at the relevant time
was Principal Secretary of Fisheries Department, with
an ulterior motive, had interfered in the said work
and had cancelled the orders passed by the Committee
and allotted the said work to the aforesaid
respondents. It is submitted that the said respondent
was at the verge of retirement and with a mala fide
intention had allotted the work to the aforesaid
respondents at much higher rates. He submits that due
to the said act of respondent no.7, a huge loss is
being caused to the public exchequer.
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9. Mr. R.N. Dhorde, learned Special
Counsel appearing for the respondents viz. State and
its authorities, on the contrary, submits that the
earlier allotment of work in favour of the petitioners
by the respondent no.2 Commissioner of Fisheries, was
done in a hasty manner without following the
prescribed procedure. He submits that the respondent
no.2 Commissioner of Fisheries had allotted the work
to the petitioners even though they were not
qualified. He submits that when the work of allotment
of tender to the petitioners was done in a hasty
manner by the respondent no.2 Commissioner of
Fisheries, the other bidders approached the State
Government. The State Government after finding that
serious irregularities were committed by the
Commissioner of Fisheries, in the matter of allotment
of tender to the petitioners, had initially stayed the
matter.
10. The learned Special Counsel, appearing
10 10
for the respondent State and its authorities, further
submits that after re-verification, it was found that
only few persons were qualified and it was also found
that the petitioners were not qualified. He submits
that it was found that some of the petitioners were
not having necessary experience and they were allotted
work without they having any experience in the field.
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It was further found in case of some of the
petitioners, that the requisite documents like the
balance sheet, etc. were not supplied. He,
therefore, submits that the State Government had
rightly decided to cancel the decision of the
Committee. He further submits that in order to
safeguard the public interest, only the lowest
bidders, who were qualified, were called for
negotiation and the respondents to whom the work is
allotted, had agreed for lesser rates than the one
quoted by them and as such, it was decided to allot
the tenders to them.
11. 11 11 The learned Special Counsel, appearing
for the respondent State and its authorities, relies
on the judgment of the Apex Court in the case of M/s. M/s. M/s.
G.J. Fernandez Vs. State of Karnataka and others G.J. G.J. Fernandez Vs. State of Karnataka and others Fernandez Vs. State of Karnataka and others
(AIR 1990 SC 958), (AIR (AIR 1990 SC 958), and in the case of West Bengal 1990 SC 958), West Bengal West Bengal
Electricity Board Vs. Patel Engineering Co. Ltd. Electricity Electricity Board Vs. Patel Engineering Co. Ltd. Board Vs. Patel Engineering Co. Ltd.
and others (AIR 2001 SC 682). and and others (AIR 2001 SC 682). others (AIR 2001 SC 682).
12. 12 12 Mr. P.M. Shah, learned Senior Counsel,
Mr. Deshmukh and Mr. Hon, the learned Counsel
appearing for respondents, who have been allotted the
work, support the submissions made by the learned
Special Counsel appearing for the State and its
authorities.
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13. 13 13 From the perusal of the Government
Resolution dated 15th September 2008, vide which the
Government has decided to implement certain schemes
for development of fisheries under the Marathwada
Development Plan, and specifically paragraph 5(1), it
can be seen that the Committee consisting of seven
senior officers has been entrusted with the work of
purchasing the required items. The Committee consists
of following seven members :
1) Commissioner of Fisheries,
Maharashtra State, Mumbai. - Chairman.
2) Deputy Secretary (Fisheries),
Agriculture Department,
Mantralaya. - Member
3) Deputy Director of Fisheries
(Groundwater),
Commissioner’s Office. - Member
4) Regional Deputy Commissioner
of Fisheries, Aurangabad. - Member
5) Assistant Commissioner of
Fisheries, Aurangabad. - Member
6) Accounts Officer,
Commissioner’s Office. - Member
7) Assistant Commissioner of
Fisheries - Member Secretary
. It can be seen from the record, that the said
Committee in its meeting dated 11th November 2008,
after opening the tenders of all the persons, had
decided to allot the work to the petitioners finding
their bids to be lowest. From the perusal of the
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proceedings of the meeting, it would reveal that the
Committee had also unanimously decided to relax
certain minor conditions in respect of all the
tenderers. It may be emphasised that the decision to
relax the conditions was not in case of particular
tenderers but in case of all tenderers. It can
further be seen that the decision of the Committee to
relax the conditions was with respect to non-essential
conditions and not regarding essential conditions.
. From the record, it would reveal that
after decision of the Committee was taken on 11th
November 2008, the Honourable Minister for Fisheries
Development granted stay. It appears that this was on
the basis of certain complaints made by the persons
who were not allotted the contract. It appears that
thereafter the Principal Secretary of Fisheries
Development directed the respondent no.2 Commissioner
of Fisheries to allot the work to the respondents
mentioned herein above, at the rate of Rs. 690/- per
thousand for hatchery prawn seeds and at the rate of
Rs. 590/- per thousand for natural prawn seeds, vide
communication dated 3rd December 2008. It further
appears that in so far as fish fingerlings are
concerned, it was directed to award the contract at
the rate of Rs. 525/- per thousand. After receipt of
the aforesaid communication from the Principal
Secretary, the members of the aforesaid Committee
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again met on 16th December 2008. The members of the
Committee unanimously found that the decision of the
State Government to allot the work to the respondents
aforesaid, is totally contrary to public interest
inasmuch as, huge loss to the public exchequer would
be caused if the tenders were awarded to the aforesaid
respondents instead of the petitioners. The
comparative chart of the rates quoted by the
petitioners and the respondents is as under :-
1) Prawn Seeds
Petitioner in Rs.410/-
W.P. No.9/2009, (Per thousand)
Mahendra.
Respondents, Rs. 690/-
M/s. Kishanlal Gahiram & (Per thousand)
Company, and M/s. Sun
Enterprises, Aurangabad.
2) Hatcheries Prawn Seeds
Petitioner in Rs. 410/-
W.P. 450/2009, (Per thousand)
M/s. Sahyadri Outdoors,
Pune.
Respondents, Rs. 590/-
M/s. Kishanlal Gahiram & (Per thousand)
Company, and M/s. Sun
Enterprises, Aurangabad.
3) Fish fingerlings
Petitioner in Rs. 330/-
W.P. No. 1058/2009, (Per thousand)
M/s. Deshmukh Fish-Feed
Agency, Ambhai.
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Respondent, Rs. 650/-
M/s. Maniram Enterprises, (Per thousand)
Navi Mumbai.
14. 14 14 The Committee has found that if the work
was allotted as per the directions of the Government,
loss would be caused to the public exchequer to the
tune of Rs. 112 Lacs, in so far as hatcheries prawn
seeds are concerned, Rs. 72 Lacs, in so far as
natural prawn seeds are concerned, and Rs. 40 Lacs,
in so far as fish fingerlings are concerned. However,
it appears that in spite of aforesaid decision of the
Committee, which was forwarded to the State
Government, the State Government stood by its decision
to allot the work at higher rates.
15. 15 15 From the perusal of the record, it would
reveal that since the respondent no.2 Commissioner of
Fisheries, did not enter into the contract with the
respondents who were directed to be awarded the tender
by the State Government, the respondent no.7 has
himself executed agreements with the aforesaid
respondents. It can be seen from the letter which is
at page 119/P in the record, that the respondent no.7
has entered into the contract with the respondent M/s.
Maniram Enterprises on 27th December 2008, though the
said respondent had not submitted bank guarantee to
the tune of 10 % of contract value. The respondent
no.7 has stated in the said letter, that he was
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entering into an agreement on the same date on 100
Rupees stamp paper. The said respondent was directed
to bring bank guarantee of 10 % of contract value and
submit the same subsequently. It further appears that
the respondent no.7 has addressed a letter to the
Regional Deputy Commissioner of Fisheries, Aurangabad,
directing him to place the order for calling of fish
fingerlings of 50 mm size. It further appears from
the record, that in so far as prawn seeds are
concerned, the respondent no.7 has entered into
agreement with M/s. Kishanlal Gahiram & Company,
Yeotmal and M/s. Sun Enterprises, Aurangabad, on 24th
December 2008 and 26th December 2008, respectively.
It is pertinent to note that all these agreements have
been entered into at Nagpur.
16. 16 16 One more thing that needs to be noted
from the file is that there is a noting by the
respondent no.7 to the effect that a letter dated 27th
December 2008 is issued today instructing the
Commissioner of Fisheries not to give reply to court
matter to avoid complications. It appears that the
letter to the said effect is also addressed to the
respondent no.2 by the respondent no.1 on the same
date. It is clear from the record, that the
respondent no.7 with keen interest has moved the file
and also got the contracts executed in favour of the
aforesaid respondents on 24th, 26th and 27th December
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2008 at Nagpur, though the seat of his office is at
Mumbai. It cannot, therefore, be said that the
allegations of the petitioners, that the respondent
no.7 in a hasty manner, had got the contracts executed
at Nagpur, where the legislative assembly was in
session, are without substance.
17. 17 17 It could also be seen that the
Government had also dissolved the said Purchase
Committee since the Commissioner of Fisheries had
refused to abide by the orders passed by the
Government.
18. 18 18 Now, let us examine the correctness of
the reasons given by the State Government for
upsetting the decision of the Purchase Committee. The
reasons given in the affidavit, in so far as the
petitioner in Writ Petition No. 9/2009 is concerned,
are that the experience certificates which were given
by the petitioner, appear to be fictitious, that the
documents submitted by the petitioner were not counter
signed by him, that his financial condition was not
sound. However, from the perusal of the notice
inviting tender it would reveal that the tender notice
does not require that the person participating in the
bid should have experience. The only requirement is
that if he has experience in the field, he should
submit documents in support thereof.
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19. 19 19 In so far as the petitioner in Writ
Petition No. 1058/2009 is concerned, the reason given
is that the income of the petitioner was around Rs.
1,00,000/- per annum and, therefore, he was not in a
position to do the work. The other reason given was
that the figures regarding experience given by the
petitioner were fictitious and imaginary. The other
reason given was that the petitioner had not signed
copies of certain documents. As stated herein above,
the tender notice did not require any of the
compliances on which rejection was sought to be made
by the respondents.
20. 20 20 In so far as the petitioner in Writ
Petition No. 450/2009 is concerned, the reason given
is that the petitioner had not enclosed the experience
certificate of supply of prawn seeds or fish seeds to
the Government of Maharashtra, that his total turnover
was Rs. 5,57,197/- and that the loan taken by him
from Pune People’s Cooperative Bank was Rs.
9,70,595/-. It was further the reason that the the
certificate dated 3-11-2008 from M/s. Priya Prawn
Hatchery, Ratnagiri, that the petitioners supplied
prawn seeds to M/s. Sahyadri Outdoors for two years,
was a false statement. As stated herein above, from
the perusal of the notice inviting tenders, it can be
seen that there is no mention in the notice inviting
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tenders, that it is necessary for a bidder to have
previous experience. The only requirement is that if
a bidder has participated in similar types of bids
earlier, the details thereof and details regarding his
past experience should be given. It can further be
seen that in so far as the financial status of the
bidder is concerned, there is no minimum requirement
stipulated in the notice inviting tenders. The only
requirement is that the bidder should give certificate
of his worthiness or the audited accounts for the last
three years.
21. 21 21 From the perusal of the tender
documents, it would reveal that all the petitioners
had submitted either their experience certificates or
the certificates from the suppliers of fish seeds
certifying the earlier transactions entered into by
such suppliers with the petitioners. The petitioners
had also submitted their income tax returns certified
by the Chartered Accountants. In any event, as noted
herein above, there is no requirement that a bidder
should have a previous experience. So also, there is
no requirement which provides any minimum amount in so
far as financial status of the bidder is concerned.
We are, therefore, of the considered view that the
reasoning given by the State for setting aside the
decision of the Purchase Committee are totally
extraneous, irrational and arbitrary.
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22. 22 22 In so far as the contention regarding
relaxation of condition, to the effect that the
Committee had opened second envelope of even
unqualified bidders is concerned, we find that the
said reason is without substance. From the perusal of
the minutes of the meeting of the Purchase Committee
dated 10th November 2008, it can be seen that the
Committee had found that almost all the bidders had
not complied with some of the requirements. The
Committee had, therefore, unanimously resolved to
formulate the policy as to the conditions for which,
relaxation should be granted and envelope "B" of such
bidder should be opened. It can thus be seen that the
Purchase Committee had adopted a uniform policy
regarding relaxation of certain conditions which was
made applicable to all bidders. It is not the case of
any of the parties, that the conditions were only
relaxed in favour of some of the persons so as to
favour them. It can thus be seen that the power of
relaxation which was exercised by the Committee was
fair, reasonable and bona fide. The Apex Court in the
case of M/s. B.S.N. Joshi & Sons Ltd. Vs. Nair M/s. B.S.N. Joshi & Sons Ltd. Vs. Nair M/s. B.S.N. Joshi & Sons Ltd. Vs. Nair
Coal Services Ltd. & others (AIR 2007 SC 437) Coal Coal Services Ltd. & others (AIR 2007 SC 437), in Services Ltd. & others (AIR 2007 SC 437)
paragraph 71 of the judgment, has observed thus :
" Whether an employer has
power of relaxation must be found
out not only from the terms of the
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notice inviting tender but also the
general practice prevailing in
India. For the said purpose, the
court may consider the practice
prevailing in the past. Keeping in
view a particular object, if in
effect and substance it is found
that the offer made by one of the
bidders substantially satisfies the
requirements of the conditions of
notice inviting tender, the
employer may be said to have a
general power of relaxation in that
behalf. Once such a power is
exercised, one of the questions
which would arise for consideration
by the superior courts would be as
to whether exercise of such power
was fair, reasonable and bona fide.
If the answer thereto is not in the
negative, save and except for
sufficient and cogent reasons, the
writ courts would be well advised
to refrain themselves in exercise
of their discretionary
jurisdiction."
23. 23 23 We find that there was no occasion for
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the State Government to have interfered in the well
deliberated and reasoned decision of the Purchase
Committee. After the decision of the State Government
to award contract to aforesaid respondents, the
Purchase Committee again in its meeting dated 16th
December 2008, reiterated its decision and has also
given reasons as to how a great loss would be caused
to the public exchequer, if the decision of the
Government to award the contract to the aforesaid
respondents was to be implemented. However, it
appears that the respondent no.7 was bent upon
awarding the contract to the aforesaid respondents
even at the cost of causing a loss to the public
exchequer. The Purchase Committee which was
consisting of seven senior officers of the Fisheries
Department having expertise in the field, after due
deliberations, had taken a considered decision.
However, the same was upset on flimsy reasons. One
reason which was given was that the petitioners were
not possessing necessary experience. As already
discussed herein above, the said reasons are
irrelevant and irrational, inasmuch as, in the notice
inviting tenders, there was no condition stipulated
regarding experience qualification.
24. 24 24 In so far as the other reason given
regarding non-supply of documents is concerned, it can
be seen that the relaxation with respect to some of
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the documents was granted by the Committee by a
uniform policy decision applicable to all the
tenderers. As already held by the Apex Court in the
case of M/s. B.S.N. Joshi & Sons Ltd. (supra) M/s. B.S.N. Joshi & Sons Ltd. (supra), this M/s. B.S.N. Joshi & Sons Ltd. (supra)
is permissible in law. As such, the reason for
upsetting the decision of the Purchase Committee is
also not in accordance with law.
25. 25 25 From the perusal of the file, it appears
that the Deputy Secretary of the concerned Department
had initially put up a note pointing out that the
rates offered by the complaint tenderers were almost
twice than the one quoted by the petitioners. He has
also noted that the complainants had lodged the
complaints due to frustration as the contract was not
awarded in their favour. However, it appears that the
said Deputy Secretary was made to write another note
on 3rd December 2008. The respondent no.7 on 3rd
December 2008 has put up a noting in the file
recommending the award of contract to the aforesaid
respondents. It appears that after said decision was
communicated to the respondent no.2, Commissioner of
Fisheries, the Committee again met and discussed about
the loss that will be caused to the public exchequer
if the decision of the State Government was
implemented.
26. 26 26 It further appears from the record, that
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the respondent no.7 addressed a communication to the
respondent no.2, dated 24th December 2008, thereby
dissolving the Purchase Committee. It further appears
that since the Commissioner did not execute the
agreement with the aforesaid respondents, the
respondent no.7 himself executed the agreements with
the aforesaid respondents on 24th, 26th and 27th
December 2008. It appears that the respondent no.7
was showing undue haste in getting the contracts
executed in favour of the aforesaid respondents. It
appears that the respondent no.7, though has upset the
well reasoned decision of the Committee on the ground
of non-compliances of certain conditions, was in hurry
to enter into the agreement with the aforesaid
respondents even without the requisite bank guarantee
being furnished by some of the respondents. A letter
addressed to M/s. Maniram Enterprises, Navi Mumbai,
by respondent no.7, reads thus :
(P.T.O.)
GOVERNMENT OF J.No.MATSYAVI-1008/CR-274/
MAHARASHTRA I/ADF-13,
Agriculture, Animal
Husbandry, Dairy Development
and Fisheries Department,
Mantralaya Annexe,
Gorekh Megh, Mumbai 400 032.
I.A.S.,
Principal Camp : Nagpur
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Secretary (ADF)
Date : December 27, 2008
To,
M/s. Maniram Enterprises,
Row House No. B-66, Sector-4,
Airoli, Navi Mumbai 400 709.
Sub : Your request for waiving
of Bank guarantee.
Dear Sirs,
. As per the tender document your are
supposed to give Bank guarantee of 10 % of
contract value as well as Demand Draft of 3 %
of contract value as security deposit.
. You have given Demand Draft of 3 % of
the contract value. However, you have not yet
submitted Bank Guarantee of 10 % of contract
value to implement Marathwada Development
package as early as possible. We are entering
into an agreement today with you on 100 rupees
stamp paper. However, you are requested to
bring Bank Guarantee of 10 % of contract value
and submit the same to the Regional Deputy
Commissioner of Fisheries, Aurangabad.
. Thanking you,
Yours faithfully,
Sd/-
(Gorekh Megh)
Principal Secretary
. It is thus amply clear that the respondent no.7
was showing undue interest and haste in awarding
contract to the aforesaid respondents and entered into
contract with them.
. Not only this, but the respondent no.7 has also
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made an endorsement in the file to the following
effect :-
" A letter dated 27-12-2008 is
issued today instructing the
Commissioner of Fisheries not to
give reply to court matter to avoid
complications."
. A letter to that effect was also addressed to
the Commissioner of Fisheries by the respondent no.7.
As a matter of fact, such an endorsement and such a
communication amounts to interference in the
administration of justice.
27. 27 27 No doubt, that scope of judicial review
in contractual matters is limited, in exercise of our
jurisdiction under Article 226. It is also equally
true that the court is required to examine the
correctness or otherwise of decision making process
and not the actual decision. In the present case, we
find that the decision making process by the State
Government suffers from illegality, irrationality,
unreasonableness, arbitrariness, unfairness and
procedural impropriety. Not only this, but the said
process also appears to be guided by keen and personal
interest shown by respondent no.7, who has also in a
hasty manner entered into contract with the aforesaid
respondents. The petitioners have specifically
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alleged that the respondent no.7 was to retire on 31st
of December 2008. The agreements have been executed
by respondent no.7 himself with the respondents to
whom contract is awarded on 24th, 26th and 27th of
December 2008 at Nagpur, and also without the said
respondent furnishing requisite bank guarantee. Due
to the decision of the State to award contract to the
aforesaid respondents, at the rates almost twice than
the ones quoted by the petitioners, huge loss of
crores of rupees would be caused to the State
exchequer. We are, therefore, of the considered view
that the respondent State was not justified in
interfering with the well reasoned decision of the
Purchase Committee. In any case, if the respondent
State was of the view that the decision taken by the
respondent Committee was not proper, it could have
very well directed re-issuance of tenders. The action
of the respondent State in directly awarding contract
to the aforesaid respondents is also not sustainable
in law.
28. 28 28 It can further be seen that the action
of the respondent State in cancelling award of
contract to the petitioners, which was awarded to them
in accordance with letter dated 11th November 2008,
without affording an opportunity of hearing to the
petitioners, is also not sustainable in law. The
contract which was awarded in favour of the
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petitioners, without being cancelled, was awarded in
favour of the aforesaid respondents, without giving
any notice or hearing to the petitioners. Had the
petitioners been given notice with regard to the
material that was sought to be used against them they
could have very well represented to the State
regarding relevancy or otherwise of the material
and/or reasons which were sought to be used against
them. The said action, in our considered view, is
also violative of principles of natural justice.
29. 29 29 In so far as the reliance placed by the
learned Special Counsel appearing for the respondent
State, on the judgment of the Apex Court, in the case
of West Bengal Electricity Board Vs. Patel West Bengal Electricity Board Vs. Patel West Bengal Electricity Board Vs. Patel
Engineering Company Ltd. and others (supra), Engineering Engineering Company Ltd. and others (supra), is Company Ltd. and others (supra),
concerned, there can be no dispute with the
proposition that conditions are to be strictly
complied with and that when the lowest bidder fails to
satisfy the conditions, subject to which bids are
invited, is not entitled to award the contract.
However, in the present case, it can be seen that the
Purchase Committee had by an uniform policy decided to
relax some of the conditions in favour of all
tenderers. In that view of the matter, we find that
the said judgment would not be applicable to the facts
of the present case. As already held by the Apex
Court, in the case of B.S.N. Joshi & Sons Ltd. Vs. B.S.N. Joshi & Sons Ltd. Vs. B.S.N. Joshi & Sons Ltd. Vs.
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Nair Coal Services Ltd. and others (supra), Nair Nair Coal Services Ltd. and others (supra), if the Coal Services Ltd. and others (supra),
conditions are relaxed in favour of all the tenderers,
the same would be permissible in law.
30. 30 30 In so far as the reliance placed by the
learned Special Counsel appearing for the respondent
State, on the judgment of the Apex Court in the case
of M/s. G.J. Fernandez Vs. State of Karnataka and M/s. G.J. Fernandez Vs. State of Karnataka and M/s. G.J. Fernandez Vs. State of Karnataka and
others (supra) others others (supra), is concerned, the said judgment would (supra)
also not support the case of the respondent State.
But as a matter of fact, it supports the decision of
the Purchase Committee. In the aforesaid judgment,
the Apex Court has held that the relaxation of the
conditions in the notice inviting tenders is
permissible. However, such relaxation should not be
arbitrary. As already held herein above, we find that
the decision to relax certain conditions was taken as
a uniform policy applicable to all the bidders.
31. 31 31 Before we part with the judgment, we
find that it would be appropriate to place on record
our appreciation, for the courage shown and the bold
stand taken by the Committee consisting of seven
senior officers of the Fisheries Department under the
chairmanship of the Commissioner of Fisheries. Though
the respondent no.1 and, particularly the respondent
no.7, were bent upon to award the contract at the cost
of huge loss to the public exchequer, they unanimously
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re-affirmed their stand in the meeting of the Purchase
Committee on 16th December 2008, which necessitated
the respondent nos.1 and 7 to dissolve the Committee
itself. Not only this, but the authorities did not
comply with the directions of the respondent nos.1 and
7 to execute the agreements in favour of the
respondents aforesaid, which necessitated respondent
no.7 to himself enter the agreements with the
aforesaid respondents.
32. 32 32 In the light of the reasoning given
herein above, the petitions deserve to be allowed.
33. 33 33 Hence, the petitions are allowed.
. The letter dated 3rd December 2008, issued by
respondent no.1 is quashed and set aside. The work
orders issued pursuant to that letter are also set
aside. As a consequence, the selection process for
procurement of prawn seeds and fish fingerlings is set
aside. The Government may, if it so desires, issue
fresh tenders for issuing work orders for the supply
of prawn seeds and fish fingerlings.
34. 34 Rule is made absolute in the above
34
terms. There shall be no order as to costs.
35. 35 35 Mr. Rajendra Deshmukh, learned Counsel
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( 31 )
for respondent nos.4 and 5, in Writ Petition Nos.
9/2009 and 450/2009 and for respondent no.5 in Writ
Petition No. 1058/2009, to whom the contract is
awarded, prays for a stay of this order. We have
considered his submission and we do not think that
there is any need to grant stay to this order.
( B.R. Gavai ) B.R. Gavai ) B.R. Gavai ) ( Smt. Nishita Mhatre ) Smt. Nishita Mhatre ) Smt. Nishita Mhatre )
JUDGE JUDGE JUDGE JUDGE JUDGE JUDGE
---------
bgp/WP9etc
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY, IN IN THE HIGH COURT OF JUDICATURE AT BOMBAY, THE HIGH COURT OF JUDICATURE AT BOMBAY,
AURANGABAD BENCH, AT AURANGABAD. AURANGABAD AURANGABAD BENCH, AT AURANGABAD. BENCH, AT AURANGABAD.
WRIT PETITION NO. 9 OF 2009 WRIT WRIT PETITION NO. 9 OF 2009 PETITION NO. 9 OF 2009
Mahendra s/o. Hiraman Mallav,
Age : 37 years,
Occupation : Business,
R/o. at post Shirur,
Taluka : Shirur,
District : Pune. .. Petitioner
versus
1. The State of Maharashtra,
Through its Principal Secretary,
Government of Maharashtra,
Animal Husbandry, Dairy Development
And Fisheries Department,
Mantralaya,
Mumbai - 32.
2. The Commissioner for Fisheries,
Maharashtra State,
Taraporewala Aquarium,
Netaji Subhash Road,
Mumbai.
3. The Assistant Commissioner
for Fisheries or Member-
Secretary, Purchase Committee
Of Marathwada Package,
Department of Fisheries,
Taraporewala Aquarium,
Netaji Subhash Road,
Mumbai.
4. M/s. Kishanlal Gahiram & Company,
Through its Proprietor,
Kishanlal s/o. Gahiram Lalwani,
Dana Bazar, Yeotmal,
Taluka and District : Yeotmal.
5. M/s. Sun Enterprises,
Through its Proprietor,
Suresh s/o. Madhav Samag,
S.B. Colony, Aurangpura,
Aurangabad,
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( 2 )
Taluka and District : Aurangabad.
6. Raviseth Dagadu Patil, .. Respondent .. .. Respondent Respondent
Honourable Minister for Animal no.6 deleted. no.6 no.6 deleted. deleted.
Husbandry And Dairy Development
Department, 4th Floor,
Mantralaya, Mumbai - 32.
7. Gorekh Govind Megh,
Yeshodhan Building,
2nd Floor, Opp : ICC Club House,
Near Mantralaya,
Mumbai - 32. .. Respondents.
--------
Mr. A.N. Kakade, Advocate, for the
petitioner.
Mr. R.N. Dhorde, Special Counsel,
with Mrs. R.D. Reddy, Assistant
Government Pleader, for
respondent nos.1, 2 and 3.
Mr. Rajendra Deshmukh, Advocate, for
respondent nos.4 and 5.
Mr. V.D. Hon, Advocate, for respondent
no.6 (Respondent no.6 is deleted)
Mr. P.M. Shah, Senior Advocate, with
Mr. Swapnil Joshi, Advocate, for
respondent no.7.
--------
I T H
W I T H I T H
WRIT PETITION NO. 450 OF 2009 WRIT WRIT PETITION NO. 450 OF 2009 PETITION NO. 450 OF 2009
M/s. Sahyadri Outdoors,
Through its Partner,
Yeshwant s/o. Baburao Nikam,
Age : 48 years,
Occupation : Business,
R/o. 3, Gangadhar Apartment,
586, Narayan Peth, Pune,
District : Pune. .. Petitioner.
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( 3 )
versus
1. The State of Maharashtra,
Through its Principal Secretary,
Government of Maharashtra,
Animal Husbandry, Dairy Development
And Fisheries Department,
Mantralaya,
Mumbai - 32.
2. The Commissioner for Fisheries,
Maharashtra State,
Taraporewala Aquarium,
Netaji Subhash Road,
Mumbai.
3. The Assistant Commissioner
for Fisheries or Member-
Secretary, Purchase Committee
of Marathwada Package,
Department of Fisheries
Taraporewala Aquarium,
Netaji Subhash Road,
Mumbai.
4. M/s. Kishanlal Gahiram & Company,
Through its Proprietor,
Kishanlal Gahiram Lalwani,
Dana Bazar,
Taluka and District : Yeotmal.
5. M/s. Sun Enterprises,
Through its Proprietor,
Suresh Madhav Samag,
S.B. Colony, Aurangpura,
District : Aurangabad.
6. Raviseth Dagadu Patil, .. Respondent .. .. Respondent Respondent
Honourable Minister for deleted.
no.6 deleted. no.6 no.6 deleted.
Animal Husbandry and
Dairy Development Department,
4th Floor, Mantralaya,
Mumbai - 32.
7. Gorekh Govind Megh,
Yeshodhan Building,
2nd Floor, Opp : ICC Club House,
Near Mantralaya,
Mumbai - 32. .. Respondents.
----------
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( 4 )
Mr. A.N. Kakade, Advocate, for the
petitioner.
Mr. R.N. Dhorde, Special Counsel,
with Mrs. R.D. Reddy, Assistant Government
Pleader, for respondent nos.1, 2 and 3.
Mr. Rajendra Deshmukh, Advocate, for
respondent nos.4 and 5.
Mr. V.D. Hon, Advocate, for respondent
no.6 (Respondent no.6 is deleted).
Mr. P.M. Shah, Senior Advocate, with
Mr. Swapnil Joshi, Advocate, for
respondent no.7.
----------
W I T H I T H I T H
WRIT PETITION NO. 1058 OF 2009 WRIT WRIT PETITION NO. 1058 OF 2009 PETITION NO. 1058 OF 2009
M/s. Deshmukh Fish-Feed Agency,
Ambhai, Taluka : Sillod,
District : Aurangabad, through
Its Proprietor Ejaj Asmat Deshmukh,
Age : 48 years,
Occupation : Business,
R/o. Ambhai, Taluka : Sillod,
District : Aurangabad. .. Petitioner.
versus
1. The State of Maharashtra,
Through its Principal Secretary,
Government of Maharashtra,
Animal Husbandry, Dairy Development
and Fisheries Department,
Mantralaya,
Mumbai - 32.
2. The Commissioner for Fisheries,
Maharashtra State, Taraporewala
Aquarium, Netaji Subhash Road,
Mumbai.
3. The Assistant Commissioner
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for Fisheries or Member-
Secretary, Purchase Committee
of Marathwada Package,
Department of Fisheries,
Taraporewala Aquarium,
Netaji Subhash Road,
Mumbai.
4. The Regional Deputy Commissioner,
Fisheries, Aurangabad Division,
Aurangabad.
5. M/s. Maniram Enterprises,
Row Houses No. B-66,
Sector No.4, Airoli,
Navi Mumbai - 400 708,
Through its sole proprietor,
Dinesh s/o. Bapurao Deshmukh,
Age : 42 years,
Occupation : Business,
R/o. 1004, Nilambari Cooperative
Housing Society Ltd.,
Plot No.1, Sector-19,
Airoli, New Mumbai - 78.
6. Raviseth Dagadu Patil, .. Respondent .. .. Respondent Respondent
Honourable Minister for Animal no.6 deleted. no.6 no.6 deleted. deleted.
Husbandry and Dairy Development
Department, 4th Floor,
Mantralaya, Mumbai - 32.
7. Gorekh Megh,
Yeshodhan Building,
2nd Floor, Opp : ICC Club House,
Near Mantralaya, Mumbai - 32. .. Respondents.
-----------
Mr. A.N. Kakade, Advocate, for the
petitioner.
Mr. R.N. Dhorde, Special Counsel,
with Mrs. R.D. Reddy, Assistant Government
Pleader, for respondent nos.1 to 4.
Mr. Rajendra Deshmukh, Advocate, for
respondent no.5.
Mr. V.D. Hon, Advocate, for respondent
no.6 (Respondent no.6 is deleted).
Mr. P.M. Shah, Senior Advocate, with
Mr. Swapnil Joshi, Advocate, for
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( 6 )
respondent no.7.
*
CORAM : Smt. NISHITA MHATRE CORAM CORAM : Smt. NISHITA MHATRE : Smt. NISHITA MHATRE
&
B.R. GAVAI, JJ B.R. B.R. GAVAI, JJ. GAVAI, JJ
DATE : 5TH MARCH 2009 DATE DATE : 5TH MARCH 2009 : 5TH MARCH 2009
JUDGMENT (Per B.R. GAVAI, J.) : JUDGMENT JUDGMENT (Per B.R. GAVAI, J.) : (Per B.R. GAVAI, J.) :
1. Rule. Rule made returnable forthwith,
by consent.
2. On an application made by the learned
Advocate for the petitioners, he is permitted to
delete respondent no.6 in all the three petitions,
from the array of the respondents.
3. All these three petitions have been
filed by the petitioners, thereby challenging the
action on the part of the respondent, State of
Maharashtra, in cancelling the allotment of work of
supply of prawn seeds and fish fingerlings, which was
allotted to them by the Assistant Commissioner of
Fisheries, Mumbai, vide letter dated 11th November
2008, and the letter dated 3rd December 2008 vide
which the respondent no.1 i.e. Principal Secretary,
Government of Maharashtra, Animal Husbandry, Dairy
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Development & Fisheries Department, Mumbai, directed
the respondent no.2 i.e. Commissioner of Fisheries,
Mumbai, to allot the said work to respondent no.4 in
Writ Petition No. 9/2009, respondent nos.4 and 5 in
Writ Petition No. 450/2009 and respondent no.5 in
Writ Petition No. 1058/2009.
4. Since the factual position as well as
the legal position is identical in all the three
petitions, the said petitions were heard together and
are being decided by the common judgment and order.
5. The facts, in nutshell, giving rise to
the present petitions are as under :-
(a) (a) (a) The respondents authorities are hereinafter
referred to as they are arrayed in Writ Petition No.
9/2009.
(b) (b) (b) The respondent no.2, Commissioner of Fisheries,
Maharashtra State, had issued a tender notice wherein
tenders were invited for the work of supply of
procurement of prawn seeds, hatcheries prawn seeds and
fish fingerlings. The tender notice was issued on 8th
October 2008. In response to the tender notice, in
all, 18 persons including the petitioners and the
respondents who have been allotted the work, by the
impugned order, had submitted their bids.
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(c) (c) (c) The tenders were opened before the Committee
which consisted of various experts under the
Chairmanship of respondent no.2 Commissioner of
Fisheries, on 10th November 2008. Since the bids of
the petitioners were found to be lowest, the
respondent no.3 i.e. Assistant Commissioner of
Fisheries, Mumbai, vide communication dated 11th
November 2008, informed the petitioners that since
their offer was lowest, the same was accepted.
However, thereafter the respondent no.1 had stayed the
process of allotment of work to the petitioners and
subsequently issued an order dated 3rd December 2008,
thereby awarding the aforesaid work to various
respondents mentioned herein above. Being aggrieved
by the said action on the part of the respondent no.1,
the petitioners have filed the present petitions.
6. We have heard the learned Counsel
appearing for the petitioners, as well as, the learned
Assistant Government Pleader and learned Counsel
appearing for the respective respondents. We have
also perused the original record of the respondent
no.1 State and of the Purchase Committee.
7. Mr. N.K. Kakade, learned Counsel
appearing for the petitioners, submits that as per the
Government Resolution dated 15th September 2008, it is
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the Committee under the chairmanship of the
Commissioner of Fisheries, which was constituted as
per the resolution, which is entrusted with the work
of allotment of work for procurement of prawn seeds
and fish fingerlings. He submits that in accordance
with the said resolution, the Committee consisting of
seven senior officers having expertise in the field,
had completed the process for selection of successful
bidders. It is submitted that the Committee after
finding the petitioners to be eligible and lowest, had
decided to allot the said work to the petitioners. He
submits that the the respondent, State of Maharashtra,
had no business to interfere with the decision taken
by the Committee.
8. The learned Counsel appearing for the
petitioners further submits that the respondent no.7
in Writ Petition No. 9/2009, who at the relevant time
was Principal Secretary of Fisheries Department, with
an ulterior motive, had interfered in the said work
and had cancelled the orders passed by the Committee
and allotted the said work to the aforesaid
respondents. It is submitted that the said respondent
was at the verge of retirement and with a mala fide
intention had allotted the work to the aforesaid
respondents at much higher rates. He submits that due
to the said act of respondent no.7, a huge loss is
being caused to the public exchequer.
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9. Mr. R.N. Dhorde, learned Special
Counsel appearing for the respondents viz. State and
its authorities, on the contrary, submits that the
earlier allotment of work in favour of the petitioners
by the respondent no.2 Commissioner of Fisheries, was
done in a hasty manner without following the
prescribed procedure. He submits that the respondent
no.2 Commissioner of Fisheries had allotted the work
to the petitioners even though they were not
qualified. He submits that when the work of allotment
of tender to the petitioners was done in a hasty
manner by the respondent no.2 Commissioner of
Fisheries, the other bidders approached the State
Government. The State Government after finding that
serious irregularities were committed by the
Commissioner of Fisheries, in the matter of allotment
of tender to the petitioners, had initially stayed the
matter.
10. The learned Special Counsel, appearing
10 10
for the respondent State and its authorities, further
submits that after re-verification, it was found that
only few persons were qualified and it was also found
that the petitioners were not qualified. He submits
that it was found that some of the petitioners were
not having necessary experience and they were allotted
work without they having any experience in the field.
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It was further found in case of some of the
petitioners, that the requisite documents like the
balance sheet, etc. were not supplied. He,
therefore, submits that the State Government had
rightly decided to cancel the decision of the
Committee. He further submits that in order to
safeguard the public interest, only the lowest
bidders, who were qualified, were called for
negotiation and the respondents to whom the work is
allotted, had agreed for lesser rates than the one
quoted by them and as such, it was decided to allot
the tenders to them.
11. 11 11 The learned Special Counsel, appearing
for the respondent State and its authorities, relies
on the judgment of the Apex Court in the case of M/s. M/s. M/s.
G.J. Fernandez Vs. State of Karnataka and others G.J. G.J. Fernandez Vs. State of Karnataka and others Fernandez Vs. State of Karnataka and others
(AIR 1990 SC 958), (AIR (AIR 1990 SC 958), and in the case of West Bengal 1990 SC 958), West Bengal West Bengal
Electricity Board Vs. Patel Engineering Co. Ltd. Electricity Electricity Board Vs. Patel Engineering Co. Ltd. Board Vs. Patel Engineering Co. Ltd.
and others (AIR 2001 SC 682). and and others (AIR 2001 SC 682). others (AIR 2001 SC 682).
12. 12 12 Mr. P.M. Shah, learned Senior Counsel,
Mr. Deshmukh and Mr. Hon, the learned Counsel
appearing for respondents, who have been allotted the
work, support the submissions made by the learned
Special Counsel appearing for the State and its
authorities.
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13. 13 13 From the perusal of the Government
Resolution dated 15th September 2008, vide which the
Government has decided to implement certain schemes
for development of fisheries under the Marathwada
Development Plan, and specifically paragraph 5(1), it
can be seen that the Committee consisting of seven
senior officers has been entrusted with the work of
purchasing the required items. The Committee consists
of following seven members :
1) Commissioner of Fisheries,
Maharashtra State, Mumbai. - Chairman.
2) Deputy Secretary (Fisheries),
Agriculture Department,
Mantralaya. - Member
3) Deputy Director of Fisheries
(Groundwater),
Commissioner’s Office. - Member
4) Regional Deputy Commissioner
of Fisheries, Aurangabad. - Member
5) Assistant Commissioner of
Fisheries, Aurangabad. - Member
6) Accounts Officer,
Commissioner’s Office. - Member
7) Assistant Commissioner of
Fisheries - Member Secretary
. It can be seen from the record, that the said
Committee in its meeting dated 11th November 2008,
after opening the tenders of all the persons, had
decided to allot the work to the petitioners finding
their bids to be lowest. From the perusal of the
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proceedings of the meeting, it would reveal that the
Committee had also unanimously decided to relax
certain minor conditions in respect of all the
tenderers. It may be emphasised that the decision to
relax the conditions was not in case of particular
tenderers but in case of all tenderers. It can
further be seen that the decision of the Committee to
relax the conditions was with respect to non-essential
conditions and not regarding essential conditions.
. From the record, it would reveal that
after decision of the Committee was taken on 11th
November 2008, the Honourable Minister for Fisheries
Development granted stay. It appears that this was on
the basis of certain complaints made by the persons
who were not allotted the contract. It appears that
thereafter the Principal Secretary of Fisheries
Development directed the respondent no.2 Commissioner
of Fisheries to allot the work to the respondents
mentioned herein above, at the rate of Rs. 690/- per
thousand for hatchery prawn seeds and at the rate of
Rs. 590/- per thousand for natural prawn seeds, vide
communication dated 3rd December 2008. It further
appears that in so far as fish fingerlings are
concerned, it was directed to award the contract at
the rate of Rs. 525/- per thousand. After receipt of
the aforesaid communication from the Principal
Secretary, the members of the aforesaid Committee
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again met on 16th December 2008. The members of the
Committee unanimously found that the decision of the
State Government to allot the work to the respondents
aforesaid, is totally contrary to public interest
inasmuch as, huge loss to the public exchequer would
be caused if the tenders were awarded to the aforesaid
respondents instead of the petitioners. The
comparative chart of the rates quoted by the
petitioners and the respondents is as under :-
1) Prawn Seeds
Petitioner in Rs.410/-
W.P. No.9/2009, (Per thousand)
Mahendra.
Respondents, Rs. 690/-
M/s. Kishanlal Gahiram & (Per thousand)
Company, and M/s. Sun
Enterprises, Aurangabad.
2) Hatcheries Prawn Seeds
Petitioner in Rs. 410/-
W.P. 450/2009, (Per thousand)
M/s. Sahyadri Outdoors,
Pune.
Respondents, Rs. 590/-
M/s. Kishanlal Gahiram & (Per thousand)
Company, and M/s. Sun
Enterprises, Aurangabad.
3) Fish fingerlings
Petitioner in Rs. 330/-
W.P. No. 1058/2009, (Per thousand)
M/s. Deshmukh Fish-Feed
Agency, Ambhai.
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Respondent, Rs. 650/-
M/s. Maniram Enterprises, (Per thousand)
Navi Mumbai.
14. 14 14 The Committee has found that if the work
was allotted as per the directions of the Government,
loss would be caused to the public exchequer to the
tune of Rs. 112 Lacs, in so far as hatcheries prawn
seeds are concerned, Rs. 72 Lacs, in so far as
natural prawn seeds are concerned, and Rs. 40 Lacs,
in so far as fish fingerlings are concerned. However,
it appears that in spite of aforesaid decision of the
Committee, which was forwarded to the State
Government, the State Government stood by its decision
to allot the work at higher rates.
15. 15 15 From the perusal of the record, it would
reveal that since the respondent no.2 Commissioner of
Fisheries, did not enter into the contract with the
respondents who were directed to be awarded the tender
by the State Government, the respondent no.7 has
himself executed agreements with the aforesaid
respondents. It can be seen from the letter which is
at page 119/P in the record, that the respondent no.7
has entered into the contract with the respondent M/s.
Maniram Enterprises on 27th December 2008, though the
said respondent had not submitted bank guarantee to
the tune of 10 % of contract value. The respondent
no.7 has stated in the said letter, that he was
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entering into an agreement on the same date on 100
Rupees stamp paper. The said respondent was directed
to bring bank guarantee of 10 % of contract value and
submit the same subsequently. It further appears that
the respondent no.7 has addressed a letter to the
Regional Deputy Commissioner of Fisheries, Aurangabad,
directing him to place the order for calling of fish
fingerlings of 50 mm size. It further appears from
the record, that in so far as prawn seeds are
concerned, the respondent no.7 has entered into
agreement with M/s. Kishanlal Gahiram & Company,
Yeotmal and M/s. Sun Enterprises, Aurangabad, on 24th
December 2008 and 26th December 2008, respectively.
It is pertinent to note that all these agreements have
been entered into at Nagpur.
16. 16 16 One more thing that needs to be noted
from the file is that there is a noting by the
respondent no.7 to the effect that a letter dated 27th
December 2008 is issued today instructing the
Commissioner of Fisheries not to give reply to court
matter to avoid complications. It appears that the
letter to the said effect is also addressed to the
respondent no.2 by the respondent no.1 on the same
date. It is clear from the record, that the
respondent no.7 with keen interest has moved the file
and also got the contracts executed in favour of the
aforesaid respondents on 24th, 26th and 27th December
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2008 at Nagpur, though the seat of his office is at
Mumbai. It cannot, therefore, be said that the
allegations of the petitioners, that the respondent
no.7 in a hasty manner, had got the contracts executed
at Nagpur, where the legislative assembly was in
session, are without substance.
17. 17 17 It could also be seen that the
Government had also dissolved the said Purchase
Committee since the Commissioner of Fisheries had
refused to abide by the orders passed by the
Government.
18. 18 18 Now, let us examine the correctness of
the reasons given by the State Government for
upsetting the decision of the Purchase Committee. The
reasons given in the affidavit, in so far as the
petitioner in Writ Petition No. 9/2009 is concerned,
are that the experience certificates which were given
by the petitioner, appear to be fictitious, that the
documents submitted by the petitioner were not counter
signed by him, that his financial condition was not
sound. However, from the perusal of the notice
inviting tender it would reveal that the tender notice
does not require that the person participating in the
bid should have experience. The only requirement is
that if he has experience in the field, he should
submit documents in support thereof.
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19. 19 19 In so far as the petitioner in Writ
Petition No. 1058/2009 is concerned, the reason given
is that the income of the petitioner was around Rs.
1,00,000/- per annum and, therefore, he was not in a
position to do the work. The other reason given was
that the figures regarding experience given by the
petitioner were fictitious and imaginary. The other
reason given was that the petitioner had not signed
copies of certain documents. As stated herein above,
the tender notice did not require any of the
compliances on which rejection was sought to be made
by the respondents.
20. 20 20 In so far as the petitioner in Writ
Petition No. 450/2009 is concerned, the reason given
is that the petitioner had not enclosed the experience
certificate of supply of prawn seeds or fish seeds to
the Government of Maharashtra, that his total turnover
was Rs. 5,57,197/- and that the loan taken by him
from Pune People’s Cooperative Bank was Rs.
9,70,595/-. It was further the reason that the the
certificate dated 3-11-2008 from M/s. Priya Prawn
Hatchery, Ratnagiri, that the petitioners supplied
prawn seeds to M/s. Sahyadri Outdoors for two years,
was a false statement. As stated herein above, from
the perusal of the notice inviting tenders, it can be
seen that there is no mention in the notice inviting
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tenders, that it is necessary for a bidder to have
previous experience. The only requirement is that if
a bidder has participated in similar types of bids
earlier, the details thereof and details regarding his
past experience should be given. It can further be
seen that in so far as the financial status of the
bidder is concerned, there is no minimum requirement
stipulated in the notice inviting tenders. The only
requirement is that the bidder should give certificate
of his worthiness or the audited accounts for the last
three years.
21. 21 21 From the perusal of the tender
documents, it would reveal that all the petitioners
had submitted either their experience certificates or
the certificates from the suppliers of fish seeds
certifying the earlier transactions entered into by
such suppliers with the petitioners. The petitioners
had also submitted their income tax returns certified
by the Chartered Accountants. In any event, as noted
herein above, there is no requirement that a bidder
should have a previous experience. So also, there is
no requirement which provides any minimum amount in so
far as financial status of the bidder is concerned.
We are, therefore, of the considered view that the
reasoning given by the State for setting aside the
decision of the Purchase Committee are totally
extraneous, irrational and arbitrary.
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22. 22 22 In so far as the contention regarding
relaxation of condition, to the effect that the
Committee had opened second envelope of even
unqualified bidders is concerned, we find that the
said reason is without substance. From the perusal of
the minutes of the meeting of the Purchase Committee
dated 10th November 2008, it can be seen that the
Committee had found that almost all the bidders had
not complied with some of the requirements. The
Committee had, therefore, unanimously resolved to
formulate the policy as to the conditions for which,
relaxation should be granted and envelope "B" of such
bidder should be opened. It can thus be seen that the
Purchase Committee had adopted a uniform policy
regarding relaxation of certain conditions which was
made applicable to all bidders. It is not the case of
any of the parties, that the conditions were only
relaxed in favour of some of the persons so as to
favour them. It can thus be seen that the power of
relaxation which was exercised by the Committee was
fair, reasonable and bona fide. The Apex Court in the
case of M/s. B.S.N. Joshi & Sons Ltd. Vs. Nair M/s. B.S.N. Joshi & Sons Ltd. Vs. Nair M/s. B.S.N. Joshi & Sons Ltd. Vs. Nair
Coal Services Ltd. & others (AIR 2007 SC 437) Coal Coal Services Ltd. & others (AIR 2007 SC 437), in Services Ltd. & others (AIR 2007 SC 437)
paragraph 71 of the judgment, has observed thus :
" Whether an employer has
power of relaxation must be found
out not only from the terms of the
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notice inviting tender but also the
general practice prevailing in
India. For the said purpose, the
court may consider the practice
prevailing in the past. Keeping in
view a particular object, if in
effect and substance it is found
that the offer made by one of the
bidders substantially satisfies the
requirements of the conditions of
notice inviting tender, the
employer may be said to have a
general power of relaxation in that
behalf. Once such a power is
exercised, one of the questions
which would arise for consideration
by the superior courts would be as
to whether exercise of such power
was fair, reasonable and bona fide.
If the answer thereto is not in the
negative, save and except for
sufficient and cogent reasons, the
writ courts would be well advised
to refrain themselves in exercise
of their discretionary
jurisdiction."
23. 23 23 We find that there was no occasion for
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the State Government to have interfered in the well
deliberated and reasoned decision of the Purchase
Committee. After the decision of the State Government
to award contract to aforesaid respondents, the
Purchase Committee again in its meeting dated 16th
December 2008, reiterated its decision and has also
given reasons as to how a great loss would be caused
to the public exchequer, if the decision of the
Government to award the contract to the aforesaid
respondents was to be implemented. However, it
appears that the respondent no.7 was bent upon
awarding the contract to the aforesaid respondents
even at the cost of causing a loss to the public
exchequer. The Purchase Committee which was
consisting of seven senior officers of the Fisheries
Department having expertise in the field, after due
deliberations, had taken a considered decision.
However, the same was upset on flimsy reasons. One
reason which was given was that the petitioners were
not possessing necessary experience. As already
discussed herein above, the said reasons are
irrelevant and irrational, inasmuch as, in the notice
inviting tenders, there was no condition stipulated
regarding experience qualification.
24. 24 24 In so far as the other reason given
regarding non-supply of documents is concerned, it can
be seen that the relaxation with respect to some of
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the documents was granted by the Committee by a
uniform policy decision applicable to all the
tenderers. As already held by the Apex Court in the
case of M/s. B.S.N. Joshi & Sons Ltd. (supra) M/s. B.S.N. Joshi & Sons Ltd. (supra), this M/s. B.S.N. Joshi & Sons Ltd. (supra)
is permissible in law. As such, the reason for
upsetting the decision of the Purchase Committee is
also not in accordance with law.
25. 25 25 From the perusal of the file, it appears
that the Deputy Secretary of the concerned Department
had initially put up a note pointing out that the
rates offered by the complaint tenderers were almost
twice than the one quoted by the petitioners. He has
also noted that the complainants had lodged the
complaints due to frustration as the contract was not
awarded in their favour. However, it appears that the
said Deputy Secretary was made to write another note
on 3rd December 2008. The respondent no.7 on 3rd
December 2008 has put up a noting in the file
recommending the award of contract to the aforesaid
respondents. It appears that after said decision was
communicated to the respondent no.2, Commissioner of
Fisheries, the Committee again met and discussed about
the loss that will be caused to the public exchequer
if the decision of the State Government was
implemented.
26. 26 26 It further appears from the record, that
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the respondent no.7 addressed a communication to the
respondent no.2, dated 24th December 2008, thereby
dissolving the Purchase Committee. It further appears
that since the Commissioner did not execute the
agreement with the aforesaid respondents, the
respondent no.7 himself executed the agreements with
the aforesaid respondents on 24th, 26th and 27th
December 2008. It appears that the respondent no.7
was showing undue haste in getting the contracts
executed in favour of the aforesaid respondents. It
appears that the respondent no.7, though has upset the
well reasoned decision of the Committee on the ground
of non-compliances of certain conditions, was in hurry
to enter into the agreement with the aforesaid
respondents even without the requisite bank guarantee
being furnished by some of the respondents. A letter
addressed to M/s. Maniram Enterprises, Navi Mumbai,
by respondent no.7, reads thus :
(P.T.O.)
GOVERNMENT OF J.No.MATSYAVI-1008/CR-274/
MAHARASHTRA I/ADF-13,
Agriculture, Animal
Husbandry, Dairy Development
and Fisheries Department,
Mantralaya Annexe,
Gorekh Megh, Mumbai 400 032.
I.A.S.,
Principal Camp : Nagpur
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Secretary (ADF)
Date : December 27, 2008
To,
M/s. Maniram Enterprises,
Row House No. B-66, Sector-4,
Airoli, Navi Mumbai 400 709.
Sub : Your request for waiving
of Bank guarantee.
Dear Sirs,
. As per the tender document your are
supposed to give Bank guarantee of 10 % of
contract value as well as Demand Draft of 3 %
of contract value as security deposit.
. You have given Demand Draft of 3 % of
the contract value. However, you have not yet
submitted Bank Guarantee of 10 % of contract
value to implement Marathwada Development
package as early as possible. We are entering
into an agreement today with you on 100 rupees
stamp paper. However, you are requested to
bring Bank Guarantee of 10 % of contract value
and submit the same to the Regional Deputy
Commissioner of Fisheries, Aurangabad.
. Thanking you,
Yours faithfully,
Sd/-
(Gorekh Megh)
Principal Secretary
. It is thus amply clear that the respondent no.7
was showing undue interest and haste in awarding
contract to the aforesaid respondents and entered into
contract with them.
. Not only this, but the respondent no.7 has also
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made an endorsement in the file to the following
effect :-
" A letter dated 27-12-2008 is
issued today instructing the
Commissioner of Fisheries not to
give reply to court matter to avoid
complications."
. A letter to that effect was also addressed to
the Commissioner of Fisheries by the respondent no.7.
As a matter of fact, such an endorsement and such a
communication amounts to interference in the
administration of justice.
27. 27 27 No doubt, that scope of judicial review
in contractual matters is limited, in exercise of our
jurisdiction under Article 226. It is also equally
true that the court is required to examine the
correctness or otherwise of decision making process
and not the actual decision. In the present case, we
find that the decision making process by the State
Government suffers from illegality, irrationality,
unreasonableness, arbitrariness, unfairness and
procedural impropriety. Not only this, but the said
process also appears to be guided by keen and personal
interest shown by respondent no.7, who has also in a
hasty manner entered into contract with the aforesaid
respondents. The petitioners have specifically
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alleged that the respondent no.7 was to retire on 31st
of December 2008. The agreements have been executed
by respondent no.7 himself with the respondents to
whom contract is awarded on 24th, 26th and 27th of
December 2008 at Nagpur, and also without the said
respondent furnishing requisite bank guarantee. Due
to the decision of the State to award contract to the
aforesaid respondents, at the rates almost twice than
the ones quoted by the petitioners, huge loss of
crores of rupees would be caused to the State
exchequer. We are, therefore, of the considered view
that the respondent State was not justified in
interfering with the well reasoned decision of the
Purchase Committee. In any case, if the respondent
State was of the view that the decision taken by the
respondent Committee was not proper, it could have
very well directed re-issuance of tenders. The action
of the respondent State in directly awarding contract
to the aforesaid respondents is also not sustainable
in law.
28. 28 28 It can further be seen that the action
of the respondent State in cancelling award of
contract to the petitioners, which was awarded to them
in accordance with letter dated 11th November 2008,
without affording an opportunity of hearing to the
petitioners, is also not sustainable in law. The
contract which was awarded in favour of the
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petitioners, without being cancelled, was awarded in
favour of the aforesaid respondents, without giving
any notice or hearing to the petitioners. Had the
petitioners been given notice with regard to the
material that was sought to be used against them they
could have very well represented to the State
regarding relevancy or otherwise of the material
and/or reasons which were sought to be used against
them. The said action, in our considered view, is
also violative of principles of natural justice.
29. 29 29 In so far as the reliance placed by the
learned Special Counsel appearing for the respondent
State, on the judgment of the Apex Court, in the case
of West Bengal Electricity Board Vs. Patel West Bengal Electricity Board Vs. Patel West Bengal Electricity Board Vs. Patel
Engineering Company Ltd. and others (supra), Engineering Engineering Company Ltd. and others (supra), is Company Ltd. and others (supra),
concerned, there can be no dispute with the
proposition that conditions are to be strictly
complied with and that when the lowest bidder fails to
satisfy the conditions, subject to which bids are
invited, is not entitled to award the contract.
However, in the present case, it can be seen that the
Purchase Committee had by an uniform policy decided to
relax some of the conditions in favour of all
tenderers. In that view of the matter, we find that
the said judgment would not be applicable to the facts
of the present case. As already held by the Apex
Court, in the case of B.S.N. Joshi & Sons Ltd. Vs. B.S.N. Joshi & Sons Ltd. Vs. B.S.N. Joshi & Sons Ltd. Vs.
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Nair Coal Services Ltd. and others (supra), Nair Nair Coal Services Ltd. and others (supra), if the Coal Services Ltd. and others (supra),
conditions are relaxed in favour of all the tenderers,
the same would be permissible in law.
30. 30 30 In so far as the reliance placed by the
learned Special Counsel appearing for the respondent
State, on the judgment of the Apex Court in the case
of M/s. G.J. Fernandez Vs. State of Karnataka and M/s. G.J. Fernandez Vs. State of Karnataka and M/s. G.J. Fernandez Vs. State of Karnataka and
others (supra) others others (supra), is concerned, the said judgment would (supra)
also not support the case of the respondent State.
But as a matter of fact, it supports the decision of
the Purchase Committee. In the aforesaid judgment,
the Apex Court has held that the relaxation of the
conditions in the notice inviting tenders is
permissible. However, such relaxation should not be
arbitrary. As already held herein above, we find that
the decision to relax certain conditions was taken as
a uniform policy applicable to all the bidders.
31. 31 31 Before we part with the judgment, we
find that it would be appropriate to place on record
our appreciation, for the courage shown and the bold
stand taken by the Committee consisting of seven
senior officers of the Fisheries Department under the
chairmanship of the Commissioner of Fisheries. Though
the respondent no.1 and, particularly the respondent
no.7, were bent upon to award the contract at the cost
of huge loss to the public exchequer, they unanimously
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re-affirmed their stand in the meeting of the Purchase
Committee on 16th December 2008, which necessitated
the respondent nos.1 and 7 to dissolve the Committee
itself. Not only this, but the authorities did not
comply with the directions of the respondent nos.1 and
7 to execute the agreements in favour of the
respondents aforesaid, which necessitated respondent
no.7 to himself enter the agreements with the
aforesaid respondents.
32. 32 32 In the light of the reasoning given
herein above, the petitions deserve to be allowed.
33. 33 33 Hence, the petitions are allowed.
. The letter dated 3rd December 2008, issued by
respondent no.1 is quashed and set aside. The work
orders issued pursuant to that letter are also set
aside. As a consequence, the selection process for
procurement of prawn seeds and fish fingerlings is set
aside. The Government may, if it so desires, issue
fresh tenders for issuing work orders for the supply
of prawn seeds and fish fingerlings.
34. 34 Rule is made absolute in the above
34
terms. There shall be no order as to costs.
35. 35 35 Mr. Rajendra Deshmukh, learned Counsel
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for respondent nos.4 and 5, in Writ Petition Nos.
9/2009 and 450/2009 and for respondent no.5 in Writ
Petition No. 1058/2009, to whom the contract is
awarded, prays for a stay of this order. We have
considered his submission and we do not think that
there is any need to grant stay to this order.
( B.R. Gavai ) B.R. Gavai ) B.R. Gavai ) ( Smt. Nishita Mhatre ) Smt. Nishita Mhatre ) Smt. Nishita Mhatre )
JUDGE JUDGE JUDGE JUDGE JUDGE JUDGE
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bgp/WP9etc
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