B.P.DAS, J & SANJU PANDA, J. W.P.(C ) NO.13783 OF 2010 (3.12.2010) SUNITA AGARWAL ………. Petitioner. .Vrs. CENTRAL ELECTRICITY SUPPLY UTILITY, BBSR & ORS. ……… Opp.Parties. For Petitioner - M/s.K.N.Jena, B.P.Bal, D.K.Mohapatra, A.K.Sahu. For Opp.Parties- M/s.N.C.Panigrahi (Sr.Advocate) S.R.Panigrahi, N.K.Tripathy & D.Dhal(for O.P.1 & 2) M/s.P.K.Rath, P.K.Satpathy, R.N.Parija, A.K.Rout & K.C.Kar. (for O.P.3) SANJU PANDA, J. In this writ application, the petitioner has challenged the action of opposite party nos.1 and 2 in respect of tender notice for supply of Service Connection Kits and awarding of such contract. SUNITA AGARWAL -V- CENTRAL ELECTRICITY SUPPLY [S.PANDA, J. ] 2. The facts as narrated in this writ application are as follows: Opposite party no.2 issued a notice inviting tender from manufacturers/authorised representatives of the manufacturers for Supply of Service Connection Kits on behalf of opposite party no.1 as it transpires from Annexure-1. The last date for submission of tender was fixed to 14.5.2010. In pursuance of the said notice, the petitioner along opposite party no.3 and three other bidders participated and submitted their tender papers. The tender papers were opened in presence of the representatives of the tenderers on the date fixed. The petitioner was declared as L-1. She quoted the price at Rs.595.92 per kit. Opposite party no.3 quoted its price at Rs.627.74 per kit. The grievance of the petitioner is that though she was declared as L- 1, opposite party nos.1 and 2 going out of the way have awarded the contract in favour of opposite party no.3 who quoted higher price in comparison with her. 3. Opposite party nos.1 and 2 filed their counter-affidavit contending that the petitioner was never declared as L-1. As per the terms and conditions of the tender call notice, the entire tender is single part tender for supply of service connection kits. A bidder participating in the tender is required to satisfy the terms in the tender condition including Clasues-1 and 9 which run as follows: “Clause-1: The officer should contain all the technical details with Brouchers, Past supply/experience, valid LTCC, PAN No., STCC, VATCC, EMD and documentary evidence of financial capacity to execute the order. The list of purchase orders executed and performance reports are also to be submitted and if required copies are to be submitted. The offer is to be valid for 90 days from the date of opening of Bid. xxx xxx xxx Clause-9: the Bids which meet out technical and commercial terms of the tender shall only be considered for price comparison cost comparison shall be on the basis of landing cost of CESU Store, Bhubaneswar/Choudwar.” 4. It is further averred in their counter affidavit that the petitioner submitted the tender without satisfying the qualifying clause. The petitioner submitted tender papers without giving the experience certificate and without any list of purchase orders executed and performance report as required under the tender call notice. The petitioner’s tender form from its inception was an incomplete tender paper. However, in the interest of the company, a letter dated 23.6.2010 was issued to the petitioner as well as opposite party no.3 calling upon them to produce the documents to show past experience, valid authorisation certificate with regard to dealership, distributorship. In reply to the said letter, the petitioner failed to submit her experience certificate, copy of the purchase order and other requirements as required under the said letter. Therefore, the only alternative for them was to consider the tender of opposite party no.3 which was the only eligible bidder in the process. The difference between the price quoted by the petitioner and opposite party no.3 is Rs.25.54 paise per kit. 5. Opposite party no.3 has also filed its counter-affidavit supporting the contentions of opposite party nos.1 and 2. However, in its counter, it has been further stated that opposite party nos.1 and 2 issued a letter on 9.6.2010 to opposite party no.3 for reducing the price but it did not agree to reduce the price as quality is to be maintained in pursuance of the letter dated 23.6.2010. It supplied all the documents including past experience service regarding supply of similar materials. Considering all the documents, the contract was awarded in its favour vide order dated 14.8.2010. It in terms of such order, out of total 15000 service connection kits, has already supplied 7500 number of kits and invested huge amount for supply of the rest of the materials. The materials covered by the tender call notice relates to supply of service connection kits which are to be installed in the consumer premises at the time of initial supply/connection of electricity from the main supply line. Quality of such materials in the public interest being paramount consideration in absence of anything to show that the petitioner matches opposite party no.3 with regard to quality and other similar requirements, the entire process of tender in favour of opposite party no.3 do not suffer from any kind of unfairness in the decision making process nor there exists any illegality. As there is no unreasonableness or mala fide in the decision making process or any kind of violation of the terms and conditions of the tender paper, the order awarding contract need not be interfered with. 6. Considering the rival submissions of the parties, this Court had directed the opposite parties to produce the record of tenders which are produced before us. After perusal of the record, it appears that opposite party no.3 was the only supplier who submitted P.O. for supply of service connection kits 26000 number of kits and also supplied 10000 numbers of Service Connection Kits on CESU vide P.O. No.5904 dated 15.2.2010 at the rate of Rs.563.83 (inclusive of all taxes and duties). 7. On verification of the price bid, it is found that M/s.Kishan Enterprises-opposite party no.3 quoted the L-2 price of Rs.627.63 (inclusive of all taxes and duties). M/s. Radhamadhav Engineers and Traders (present petitioner) quoted L-1 price of Rs.595.92 (inclusive of all taxes). The lowest bidder, the petitioner, does not have experience for Supply of Service Connection Kits as per the document furnished by the firm. Hence, it 2 was opined that the firm having supply experience of Service Connection Kits may be considered. 8. However, the matter did not end there. The authorities again issued a letter dated 23.6.2010 to the petitioner as well as opposite party no.3 to furnish certain documents. However, the record further shows that the offer of opposite party no.3 on 11.6.2010 which was made by it in pursuance of the letter dated 9.6.2010 reducing price from Rs.627.63 to Rs.621.46 was accepted by the authorities on the same date as it was written on the back of the said letter in a pencil. Therefore, it is not clear how the opposite party nos.1 and 2 have issued further letter on 23.6.2010 calling the petitioner as well as the opposite party no.3 to submit their further documents when they had already decided to accept the offer of opposite party no.2. If both the bidders have not supplied all the required documents as per the terms of the tender, how could they accept the offer of opposite party no.3 and proceed with the selection of tender. It seems that the authorities had pre-determined regarding the award of the contract before taking the final decision and waiting for the parties to supply further documents. The letter dated 23.6.2010 issued by them is only an eye-wash and the process of so- called negotiation with the petitioner and opposite party no.3 is only to give a colour of legality to their illegal act. The action of the authorities reveals their pre-determination to award the contract on 11.6.2010 in favour of opposite party no.3. 9. Learned counsel for the petitioner submitted that the process of acceptance of rate of Rs.621.45 per kit by opposite party no.3 has been done unreasonably and unequal basis by negotiation with only one bidder. The reason advanced by the opposite party nos.1 and 2 that the petitioner could not produce the experience certificate and detail information was not proved in accordance with law does not hold good as the record discloses contrary, i.e., the pre-determination of the authorities to award the contract to opposite party no.3. He cited the decision reported in (1993) 1 SCC 71 (Food Corporation of India v. M/s.Kamdhenu Cattle Feed Industries) where the apex Court has held that a bona fide decision of the public authority reached in this manner would satisfy the requirement of non-arbitrariness and withstand judicial scrutiny and submitted that in view of the said decision, action of the present opposite party nos.1 and 2 is unfair, unreasonable, illegal and meant to show undue favour to opposite party no.3, which is against the public interest. Therefore, the same is liable to be set aside. 10. Learned counsel for opposite party nos.1 and 2 submitted that the case of the petitioner was rejected by the Purchase Committee. Hence, there was no bar to negotiate with opposite party no.3 who was duly qualified and as the petitioner failed to produce the documents in support of technical and commercial details, the decision of the Purchase Committee for issuing purchase order in favour of opposite party no.3 cannot be called to be illegal and interfered with. In support of his contention, he cited the decision reported in AIR 1996 SC 11 (Tata Cellular v. Union of India) and AIR 2005 SC 2653 (Global Energy Ltd. and another v. M/s. Adani Exports Ltd. and others). 11. Learned counsel for opposite party no.3 cited the decision reported in AIR 2000 SC 801 (Air India Ltd. v. Cochin International Airport Ltd. and others) and AIR 2001 SC 682 (West Bengal Electricity Board v. Patel Engineering Co. Ltd. and others). 12. The position of law is not in dispute as settled by the apex Court where the apex Court held in West Bengal Electricity Board’s case (supra) that instructions given to bidders are to be complied with scrupulously. The principle of awarding contract to the 3 lowest tenderer applies when all things are equal. In Global Energy Ltd.’s case (supra) the apex Court held that price is not always material to be considered. 13. Be that as it may, law is well settled that though the highest tenderer can claim no right to have his tender accepted, there being a power while inviting tenders to reject all the tenders. Yet the power to reject all the tenders cannot be exercised arbitrarily and must depend for its validity on the existence of cogent reasons for such action. The object of inviting tenders for disposal of a commodity is to procure the highest price while giving equal opportunity to all the intending bidders to compete. Procuring the highest price for the commodity is undoubtedly in public interest since the amount so collected goes to the public fund. Accordingly, inadequacy of the price offered in the highest tender would be a cogent ground for negotiating with the tenderers giving them equal opportunity to revise their bids with a view to obtain the highest available price. The inadequacy may be for several reasons known in the commercial field. Inadequacy of the price quoted in the highest tender would be a question of fact in each case. Retaining the option to accept the highest tender, in case the negotiations do not yield a significantly higher offer would be fair to the tenderers besides protecting the public interest. A procedure wherein resort is had to negotiations with the tenderers for obtaining a significantly higher bid during the period when the offers in the tenders remain open for acceptance and rejection of the tenders only in the event of a significant higher bid being obtained during negotiations would ordinarily satisfy this requirement. This procedure involves giving due weight to the legitimate expectation of the highest bidder to have his tender accepted unless outbid by a higher offer, in which case acceptance of the highest offer within the time the offers remain open would be a reasonable exercise of power for public good as decided in Food Corporation of India’s case (supra). 14. In view of the above, in the present case since the authorities have not treated the tenderers equally though the petitioner has no right to claim for acceptance of her bid as she had not satisfied the terms and conditions of the tender notice. However, the authorities should have maintained greater transparency in awarding the contract as the facts narrated above. Since the action of the authorities are not free from doubt, this Court in exercise of the power of judicial review sets aside the order of awarding contract in favour of opposite party no.3 and directs opposite party nos.1 and 2 to take fresh step. The materials supplied by opposite party no.3, if already utilised, may not be disturbed. The writ application is accordingly disposed of. Writ petition disposed of. 4