WA 52/2011 BEFORE THE HON’BLE MR JUSTICE I A ANSARI THE HON’BLE MR.JUSTICE A K GOSWAMI (Goswami, J) This writ appeal is directed against the order dated 3.2.1022 passed by the learned single Judge allowing the writ petition and setting aside the order of settlement dated 14.5.2010 made in favour of the present appellant by the Cha irman, Sivasagar Municipal Board, respondent No 4, settling the New Market of St ation Chariali under Ward No 12 for the year 2010-2011, and directing the Sivasa gar Municipal Board, (for short the Board ), to issue a fresh process of settle ment of the New Market by issuing fresh tender notice. 2. The case of the respondent No 1 / writ petitioner as projected in the wr it petition is that a Notice Inviting Tender, (for short the NIT ), was issued by the respondent No 4, on 12.1.2010, inviting tenders from interested tenderers for settlement, amongst others, of New Market situated at Ward No 12 of Sivasag ar Municipal Board, for the period from 1.4.2010 to 31.3.2011. The time for rece iving sealed tenders was fixed upto 2.00 PM of 15.2.2010 and the tenders were to be opened at 3.00 PM on the same date. The terms and conditions for settlement were also indicated in the said NIT. It is also indicated in the said NIT that t he authority was not bound to accept the highest or the lowest bid and right of cancellation of all or any tender without any prior notice was reserved. 3. The writ petitioner- respondent No 1 participated in the said tender pro cess and had submitted his valid tender offering an amount of ‘ 10,60,000.00. Th e tenders were opened on 2.3.2010 in presence of his representative and it was f ound that in all there were 5 tenderers and the writ petitioner- respondent No 1 had emerged as highest valid tenderer. The appellant had offered an amount of ‘ 7,50,599.00 and he was the 4th highest tenderer. In between the bids of the res pondent No 1- writ petitioner and the appellant, there were two other tenderers who had offered - (1) ‘ 9,05,399.90 and (2) ‘ 8,60,000.00. The fifth tenderer ha d offered an amount of ‘. 7,50,001.00. The respondent No 1-writ petitioner being the highest valid tenderer had submitted a representation on 5.3.2010 as the Bo ard had not taken necessary action with regard to settlement of the New Market a nd apprehending foul play, the writ petitioner approached this Court by filing a n application under Article 226 of the Constitution of India, which was numbered as WP(C) No 1935/2010. Apparently, the writ petition was filed because of the d elay in bringing the process of settlement to an end. Initially, this Court, by order dated 22.3.2010 had issued an interim order restraining the Board, not to issue settlement order without the leave of the Court. The said writ petition fi nally came to be disposed of on 7.5.2010 by directing the Board to finalize the settlement process for the New Market expeditiously and preferably by 14.5.2010. Subsequent thereto, a decision was taken on 14.5.2010 by the Board and the mark et in question was settled with the present appellant at his offered rate of ‘ 7 ,50,599.00 for the period 15.5.2010 to 31.3.2011. The order of settlement was, c onsequently, communicated by an order dated 14.5.2010. The respondent Board and the Chairman of the Board who were arrayed as respondent Nos 2 and 3 had filed a n affidavit stating that the highest tenderer, cannot, as a matter of right, get the settlement, inasmuch as, highest bid is not the only criteria; and that the re are other factors, which are to be looked into, at the time of finalization of tenders. The affidavit also brought on record the reasons as to why the date of submission of tenders as well as opening of the same had to be deferred till 2.3.2010. The Board, while considering the tenders, found that the bid of the wr it petitioner / respondent No. 1 to be exorbitant and speculative and the same w as considered to be non-viable rate. In justification thereof, the Board had cit ed instance of settlement of Central Market for the period 2007 - 2008 when the Board had to suffer loss because of granting settlement to the highest bidder at an exhorbitant rate of ‘ 39.10 lakhs. With regard to justification for settling the market with the appellant, it was stated that his rate was viable and that he had proved to be a suitable lessee in his last tenure. 4. The Board had also indicated in their affidavit the settlement figures o f the New Market from the year 2005 - 2006 to 2009 - 2010 to show that in all th ese years the offered rate was in the vicinity of about ‘ 5,00,000.00 to ‘ 6,00, 000.00. 5. There was a reply affidavit filed on behalf of the writ petitioner-respo ndent No.1, sworn by one Shri Prantik Bora, stating, in essence, that there is a list of toll rates, to be collected from the shopkeepers and vendors for the it ems to be sold in the market. 6. A reply affidavit was also filed by the respondent Nos 2 and 3 questioni ng the authority of the deponent of the affidavit-in-reply to swear such an affi davit, he being a stranger to the proceedings. The Board also took the plea of p ublic interest in its defence for making the settlement with the appellant. 7. We have heard Mr GN Sahewala, learned senior counsel appearing for the a ppellant. We have also heard Mr G Uzir, learned counsel appearing for the respon dent No 1, Mr AC Buragohain, learned counsel for the respondent Nos 2 and 3 and the learned Government Advocate, Assam. 8. Mr GN Sahewala, learned senior counsel, appearing for the appellant, sub mitted that the learned single Judge fell into error in setting aside the order of settlement made in favour of the appellant although the materials on record d emonstrate that the bid of the highest bidder / writ petitioner was exorbitant a nd speculative and that grant of settlement to such a bidder would have affected public interest, inasmuch as, the poor vendors would have to bear the brunt for the lessee to realize the amount of the tender. He has also submitted that it i s amply borne from the records that in the past last 5 years settlement had been affected in the range of ‘ 5,00,000.00 to ‘ 6,00,000.00 and there is a sudden j ump of 75% over the last year’s bid. He submitted that the Board having taken in to consideration the relevant factors, there is no illegality in the order of se ttlement or in the process culminating in the issuance of the order of settlemen t. He also submitted that when the settlement is coming to an end on 31.3.2010, there is no justification for interfering with the order of settlement at the fa g end of the period. It was also his contention that though the learned single J udge has permitted the appellant to continue with the running of the market till fresh settlement is made or 7.3.2011, whichever is earlier, he should be allowe d to continue till 31.3.2011. 9. Mr AC Buragohain, learned counsel appearing for the respondent Nos 2 and 3, has emphatically urged that the Board having reserved its right not to accep t the highest tender, it was within the competence of the Board to select a tend erer, which according to the Board, is more suitable. Primarily adopting the sta nd reflected in the affidavit filed, the learned counsel contends that apart fro m the bid offered, there are many other considerations, which are to be taken no te of at the time of granting settlement. Such considerations, according to the learned counsel, are past performance of a tenderer, public interest and above a ll, whether the rate quoted is speculative or excessive or otherwise viable and guided by such considerations, it was considered expedient by the Board not to consider the tender of the writ petitioner- respondent and furthermore, such con siderations persuaded the Board to take a view that the present appellant is sui table and his rates are viable. 10. Per contra, Mr Uzir, appearing for the writ petitioner / respondent No 1 , has submitted that the order of settlement made in favour of the appellant ca nnot be sustained as it militates against the fundamental principles of distribu tion of state largess by a public body. It is his contention that the Board had followed a hidden criteria and the procedure adopted by the Board was not fair a nd transparent and the same has vitiated the decision making process. He, accord ingly, submitted that there is no scope for interference in this appeal and the learned single Judge had correctly applied the law relating to settlement by ten der process in the facts of the case. Mr Uzir also submitted that whatever condi tions are laid down in the NIT the same cannot be deviated and fairness demanded that the authority should state in the NIT itself, the procedure, which would b e adopted in accepting the tenders. In support of his submissions, he placed rel iance on a decision of then Apex Court in Dutta Associates Pvt Ltd Vs Indo Merca ntiles Pvt Ltd and others, reported in (1997) 1 SCC 53. 11. In Dutta Associates Pvt Ltd (supra), out of 17 tenders received, the ten der placed at Sl Nos 1 and 2 were found ineligible and, therefore, they were exc luded from consideration. The offer of the tenderer placed at Sl No 3, namely Du tta Associates Pvt Ltd, which was lowest tenderer amongst the eligible was not a ccepted. The officials worked out what they called viability range keeping in view the prevalent prices of rectified spirit outside the State as most of the r ectified spirit to be supplied under the contract had to be procured from outsid e the State. The tenderer at Sl No 11 was the lowest within the said viability range . The State respondents did not allot the work to the tenderer at Sl 11 an d instead, they called Dutta Associates Pvt Ltd to revise its offer, which it di d and its revised bid was, thereafter, accepted. This was challenged before this Court and ultimately against the decision of the Division Bench, the matter was carried to the Apex Court. The Apex Court while considering the matter of permi ssibility or otherwise of the viability range laid down as follows : \firstly, the tender notice did not specify the ’viability range’ nor did it say that only the tenders coming within the viability range will be considered. Mor e significantly, the tender notice did not even say that after receiving the ten ders, the Commissioner/government would first determine the ’viability range’ an d would then call upon the lowest eligible tenderer to make counter-offer. The e xercise of determining the viability range and calling upon Dutta Associates to make a counter-offer on the alleged ground that he was the lowest tenderer among the eligible tenderers is outside the tender notice. Fairness demanded that the authority should have notified in the tender notice itself the procedure which they proposed to adopt which accepting the tender. They did nothing of that sort . Secondly, we have not been able to understand the very concept of ’viability r ange’. . . The tenderers are all hard-headed businessmen. They know their intere st better. If they are prepared to supply rectified spirit at ‘. 11. 14 per LPL or so. it is inexplicable why should the Government think that they would not be able to do so and still prescribe a far higher viability range. . . Thirdly, th e Division Bench states repeatedly in its judgment that having determined the ’v iability range’, the government called upon only the appellant-Dutta Associates (third respondent in the Writ Petition/Writ Appeal) to make a counter-offer to c ome within the ’viability range’ and that his revised offer at the higher limit of ’viability range’ (‘. l5. 71) was accepted. This Division Bench has stretched that no such opportunity to make a counter-offer was given to any other tendere d including the first respondent. As the Division Bench has been rightly pointed out, this equally a vitiating factor. It is thus clear that the entire procedur e followed by the Commissioner and the Government of Assam in accepting the tend er of Dutta Associates (appellant herein) is unfair and opposed to the norms whi ch the government should follow in such matters viz. . openness, transparency an d fair dealing. The grounds 1 and 2. which we have indicated hereinabove are mor e fundamental than the third ground upon which the High Court has allowed the Wr it Appeal. \. 12. A reading of the aforesaid observation of the Apex Court would indicate that out of 3 grounds mentioned rendering acceptance of the tender unsustainable , ground Nos 1 and 2 are imperative and must be followed in every tender process and omission to follow the law laid down in ground Nos 1 and 2 will vitiate acc eptance of tender. Logically, therefore, it would follow that every NIT must dis close the procedure, which would be followed in the matter of acceptance or reje ction of tender so that the entire tender process becomes transparent, fair and open. 13. We take the aforesaid view from the following observation made in the ca se of Dutta Associates Pvt Ltd : \we reiterate that whatever procedure the government proposes to follow in accep ting the tender must be clearly stated in the tender notice. The consideration o f the tenders received and the procedure to be followed in the matter of accepta nce of a tender should be transparent, fair and open. While a bona fide error or error of judgment would not certainly matter, any abuse of power for extraneous reasons, it is obvious, would expose the authorities concerned, whether it is t he Minister for Excise or the Commissioner of Excise, to appropriate penalties a t the hands of the Courts, following the law laid down by this Court in Shiv Sag ar Tiwari-Vs-Union of India, (1996) 6 SCC 558 (In Re, Capt. Satish Sharma and Sh eila Kaul ). \. 14. In the present case, there is no dispute that NIT did not contain any c ondition that the authorities would consider the viability or suitability of t he tenderer in accepting the tender for settlement. Further, it would appear tha t only after opening of the tenders, in the comparative statement of tenders, it was commented that the bid of the writ petitioner / respondent No 1 is exorbita nt and speculative and found to be more than 75% of the last year’s bid. The mat erials on record also do not demonstrate that any prior decision before opening of the tenders was taken with regard to what, according to the Board, is viable and suitable rate. We express no opinion as to whether such a course would have been permissible or not, as such an issue has not fallen for our consideration while deciding the present appeal. 15. Permitting to adopt a hidden criteria in the matter of settlement of con tract is fraught with grave danger and the same is an anathema to the concept of transparency, openness and fairness, which had to be scrupulously observed in t he matter of distribution of State largess. 16. Mr Sahewala submitted that in State of Assam and another Vs Abhnandan Tr ading (P) Ltd and others, reported in (2007) 11 SCC 704, Dutta Associates Pvt Lt d (supra) had been considered and the Apex Court had observed that although doub ts were expressed by the Apex Court in Dutta Associates Pvt Ltd (supra) regardin g concept of viability range , it had indicated that unless it can be shown tha t the said procedure has been misused to favour any particular individual, it wo uld not be proper to express any opinion as to the procedure the government shou ld adopt except to say that whatever procedure is adopted should be open, fair a nd transparent. In Abhinandan Trading (P) Ltd (supra), Clause 28 of the NIT had specified that the contract would be given to the tenderer found suitable from t he viability range , which was to be determined on the basis of analysis of the cost price, export duty and transport duty by the Commissioner of Excise, Assam , which clause, incidentally, was not there in Dutta Associates Pvt Ltd (supra). 17. In our considered opinion, the case of Abhinandan Trading (P) Ltd (supra ) only reiterates what has been stated in Dutta Associates Pvt Ltd (supra) and t he Apex Court has emphatically expressed opinion that whatever procedure the gov ernment would adopt should be open, fair and transparent. In paragraph- 35 of th e judgment, the Apex Court observed as follows: 35. Before we part with this matter, having particular regard to the doubts expressed by this Court in Dutta Associates2 we merely express the view that in order to avoid future controversy, the Government of Assam may adopt some other procedure for granting similar contracts in future which is open and transparent and will not give rise to controversies of the instant nature in future. . 18. In Sargous Tours & Travels and another Vs Union of India and others, rep orted in 2003 (III) GLT 202, one of us (Ansari,J), had opined that the law laid down in Dutta Associates Pvt Ltd (supra) is bound to be followed in every tender process and the primary requirement of the tender process to remain valid is th at NIT must notify the intending tenderers the procedure that the authority conc erned proposes to follow in accepting the tender and that omission to mention ab out the concept and working in the NIT is fatal. We agree with the principles la id down in Sargous Tours (supra). 19. Further submission of the learned counsel appearing for the Board as wel l as the appellant that the bid of the writ petitioner- respondent No 1 was exor bitant and speculative, need not detain us any further. This issue is intrinsica lly linked with the broader issue of viable rate. Further, merely because there was 75% increase in the bid of the writ petitioner / respondent No 1 over the ra te offered in the last year, it cannot be said that the bid is speculative and excessive. There is a toll list in place and if any coercive measure is adopted by the lessee to extract toll from the vendors other than what is prescribed, th e Board may certainly not be powerless to set at right the wrong committed. 20. Permitting to continue the appellant to run the market till 31.3.2011 wo uld be self defeating, inasmuch as, the appellant has already enjoyed the benefi t of the settlement on the basis of a settlement order, which is, wholly not sus tainable in law. Mr Buragohain, appearing for the Board, has submitted during th e course of hearing that the Board would collect toll on its own after 7.3.2011, in case the appeal is found to be without any merit. 21. In view of what has been stated above, we see no reason to take a view c ontrary to the one taken by the learned single Judge. We find no merit in this a ppeal and, accordingly, the same is dismissed. 22. No costs.