Tanushka Automobiles Pvt. Ltd. Company vs Gwalior Development Authority and Another

S.K. Gangele, J.—The petitioner has filed this petition against the orders dt. 15.10.2010 (Annexures P/1A, P/1B and P/1C). The petitioner also challenged the decision dt. 29.9.2010 (Annexure R/2). The respondent No. 1 published a tender notice for allotment of plots for residential and commercial purposes. The offset price of the plots was fixed as Rs. 5500/- per sq. m. The petitioner submitted tender for three plots No. 1, 2 and 3 of area 3160.65 sq.m., 900 sq.m. and 900 sq.m. and quoted the price of Rs. 5500/-, 5500/- and Rs. 5551/- per sq.m. respectively. For plot No. 3, the bid of the petitioner was highest and for plots No. 1 and 2 the bid of the petitioner was second highest. The Financial Committee of the Tender decided to issue fresh bids on the basis of fresh guidelines issued by the Collector fixing the price of the land. Consequently, the amount, which was deposited by the petitioner at the initial stage, was refunded and the decision of the committee was communicated vide letters (Annexure P/1).

Learned senior counsel appearing on behalf of the petitioner submitted that the decision of the committee to cancel the tender is arbitrary and illegal. The respondent Development Authority has not followed the statutory provision of Madhya Pradesh Nagar Tatha Gram Nivesh Vikasit Bhoomiyo, Griho, Bhavano Tatha Anya Sanrachanao Ka Vyayan Niyam, 1975 (hereinafter shall be referred to as the "Rules of 1975"). He further submitted that the tender submitted by the petitioner had to be accepted.

From the facts of the case, it is clear that only for plot No. 3 the bid of the petitioner was highest and for plots No. 1 and 2 the bid of the petitioner was second highest. Hence, the petitioner had no right in regard to plots No. 1 and 2 because his bid was second highest. For Plot No. 3 and other plots Allotment Committee had considered the bids and decided to re-invite the tenders on the basis of new guidelines issued by the Collector. Consequently, the fresh tenders were invited and the respondents received the bids of Rs. 7,651/- and the plots have already been allotted to the persons. The petitioner has not made the aforesaid persons as party, who have been allotted the plots after re-tender.

Rule 18 of the Rules of 1975 gives power to the Authority to accept the tender or not to accept the highest tender after recording the reasons for doing the same. In our opinion, the reason has been assigned by the Allotment Committee. Copy of the proceedings has been filed as Annexure R/2 alongwith the reply.

Learned senior counsel appearing on behalf of the petitioner relied on the judgment of the Supreme Court in the case of Smt. Monika Gupta Vs. Union of India (UOI) and Others, and the judgment of this court in the case of Mangal Amusement Park Pvt. Ltd. Vs. State of M.P. and Others, . In our opinion, the facts of the present case are quite distinguishable, hence, the judgments cited by the learned senior counsel are not applicable in the present case.

Hon''ble Supreme Court of India in the case of Michigan Rubber (India) Ltd. Vs. The State of Karnataka and Others, has held as under in regard to powers of the court to interfere in contractual matters:-

(a) The basic requirement of Article 14 is fairness in action by the State, and non-arbitrariness is essence and substance is the heartbeat of fair play. These actions are amenable to the judicial review only to the extent that the State must act validly for a discernible reason and not whimsically for any ulterior purpose. If the State acts within the bounds of reasonableness, it would be legitimate to take into consideration the national priorities;

(b) Fixation of a value of the tender is entirely within the purview of the executive and the courts hardly have any role to play in this process except for striking down such action of the executive as is proved to be arbitrary or unreasonable. If the Government acts in conformity within certain healthy standards and norms such as awarding of contracts by inviting tenders, in those circumstances, the interference by courts is very limited;

(c) In the matter of formulating conditions of a tender document and awarding a contract, greater latitude is required to be conceded to the State authorities unless the action of the tendering authority is found to be malicious and a misuse of its statutory powers, interference by courts is not warranted;

(d) Certain preconditions or qualifications for tenders have to be laid down to ensure that the contractor has the capacity and the resources to successfully execute the work; and

(e) If the State or its instrumentalities act reasonably, fairly and in public interest in awarding contract, here again, interference by court is very restrictive since no person can claim a fundamental right to carry on business within the Government.

In the present case, the Allotment Committee has decided to invite fresh bids on the ground that the Collector had issued fresh guidelines and fixed the rate of the land and thereafter the Development Authority had received higher bids. Hence, the action of the Authority could not be said to be arbitrary and illegal. Learned senior counsel for the petitioner has also argued that it was obligatory on the part of the Authority to invite the petitioner for negotiation. In our opinion, there is no such right exists in favour of the petitioner in law or in accordance with the tender document. Apart from this, the petitioner was at liberty to participate in the fresh tender process, but the petitioner did not participate in the subsequent tender process. Apart from this, the persons, who have been allotted the plots in subsequent auction proceedings, have not been added as party in this petition. In such circumstances, in our opinion, there is no merit in this petition. It is hereby dismissed. No order as to costs.