WP(C) 5948/2010 BEFORE HON’BLE MR. JUSTICE B.P. KATAKEY JUDGMENT & ORDER (CAV) The petitioner Company, which submitted the tender pursuant to t he short tender notice dated 15th September, 2010, issued by the General Manager of Food Corporation of India, Assam Region, inviting tenders for appointment of Transport Contractors, in 2 (two) bids tendering system (technical bid and pric e bid) for transportation of foodgrains, sugar, allied materials on ad-hoc basis for a period of 6 (six) months with the right of extension for another period o f 3 (three) months from (i) Ex-Railway Siding Haibargaon to FCI FSD Itachali via weighbridge, (ii) Ex-Railway Siding Haibargaon to FCI FSD Senchowa via weighbri dge and (iii) Ex-Railway siding New Guwahati/FCI FSD Guwahati Complex to FCI FSD Hailakandi via weighbridge, has challenged the decision of the competent autho rity of Food Corporation of India (FCI) to eliminate its tender submitted for ap pointment of Transport Contractors Ex-Railway Siding New Guwahati/FCI FSD Guwaha ti Complex to FCI FSD Hailakandi via weighbridge and refusing to open the price bid on the ground that it has disqualified in the technical bid, having failed to fulfill the terms and conditions of the NIT, as communicated vide communicati on dated 4th October, 2010 by the Deputy General Manager (Region), FCI. 2. The facts relevant for the purpose of disposal of the present wr it petition may be noticed as under:- (i) The respondent FCI pursuant to the tender process initiated for appointment of the Transport Contractors for transportation of foodgrains etc. a ppointed the petitioner as Transport Contractor for carrying foodgrains etc. fro m Ex-Guwahati to Badarpurghat for the period from 24th March, 2008 to 23rd March , 2010, which was subsequently extended upto 23rd June, 2010 and from Ex-Guwahat i to Hailakandi for the period from 28.th March, 2008 to 27th March, 2010 which was extended up to 27th June, 2010. During the contracted period, the performan ce of the petitioner, however, was found to be dismal as in the month of June, 2 010, despite the indents issued, no trucks were provided by the petitioner there by affecting the public distribution system. (ii) Prior to the aforesaid contract, another contract was awarded to the petitioner for transportation of food articles etc. from Changsari/Amingaon /Guwahati to FSD Kolasib, which, however, was terminated on 13th March, 2007, fo r the failure of the petitioner to carry out the contract, which was challenged by the petitioner in Title Suit No.237/2007, wherein though on 10th November, 20 09 the learned Civil Judge (Sr. Division), No.3, Guwahati passed an order of inj unction directing the parties to maintain status quo, the same, however, has bee n stayed by this Court vide order dated 23rd December, 2009 passed in FAO No.19/ 2009. (iii) The respondent FCI on 14th December, 2009 issued another NIT for appointment of Transport Contractors, on regular basis for a period of 2 (two) years, for transportation of foodgrains, sugar, allied materials from Guwahati t o Ramnagar as well as Guwahati to Badarpurghat, pursuant to which the petitioner and others submitted their tenders. The petitioner’s offer was accepted by the FCI and it was appointed as Transport Contractor in respect of Guwahati-Ramnagar and Guwahati-Badarpurghat routes, which was communicated vide communication dat ed 17th June, 2010, asking him to deposit the security money on or before 25th J une, 2010, for issuance of formal appointment orders, which was, however, extend ed to 30th June, 2010 vide communication dated 26th June, 2010. The petitioner was also informed by the said communication that in the event of failure to depo sit the security money within the date fixed, the contract with the petitioner w ould be cancelled and alternative arrangement would be made for appointment of t he Transport Contractor at his risk and cost, as stipulated in Clause-XI of Mode l Tender Form (MTF). (iv) The petitioner and some other contractors challenged the said co mmunication dated 17th June, 2010 in WP(C) No.3682/2010. During pendency of the said writ petition, the aforesaid communication dated 26th June, 2010 was issue d, which the petitioner by filing a miscellaneous application, registered and nu mbered as Misc. Case No.2096/2010, put to challenge, wherein vide order dated 30 th June, 2010, the respondent FCI was directed not to give effect to the aforesa id communication dated 26th June, 2010. The said communications dated 17th June, 2010 and 26th June, 2010 issued by the respondent FCI were put to challenge as the petitioner and others were informed that in the event of failure to deposit the security money, their offers would be cancelled and alternative arrangement at their risk and cost would be made for transportation of foodgrains etc. The r espondent FCI filed an application for vacating the said interim order dated 30t h June, 2010, which was registered and numbered as Misc. Case No.2181/2010. Vid e order dated 30th July, 2010, a Single Bench of this Court while observing that the interim order per-se does not prohibit the respondent FCI from initiating a fresh process without invoking the risk and cost clause, and in the event the r espondent FCI suffers any financial loss in subsequent appointment of the Transp ort Contractors, the same can well be recovered from the writ petitioner in the event of dismissal of the writ petition, refused to vacate the interim order pa ssed, however, allowing the respondent Corporation to take necessary steps for t ransportation of the foodgrains. (v) The respondent FCI vide another communication dated 23rd August, 2010 invited different persons including the petitioner to participate in a lim ited spot tender for transportation of the foodgrains from Railway Siding Changs ari/CWC Amingaon/ Railhead, FSD Guwahati to FSD Shillong and from Ex-Railway Sid ing FSD Changsari/CWCAmingaon/Railhead, FSD to Aizawl/ Godown complex. Another firm, namely M/s Saikia Trade and Transport Company was awarded with the said co ntract for transportation of foodgrains etc. vide communication dated 30th Augus t, 2010, which was put to challenge by the writ petitioner in WP(C) No. 4850/201 0 and WP(C) No.4851/2010, which are still pending. (vi) In view of the aforesaid order dated 30th July, 2010 passed in M C No.2181/2010 arising out of WP(C) No.3682/2010, an ad-hoc tender notice was, t hereafter, issued by the General Manager of the FCI for appointment of the Trans port Contractor for transportation of foodgrains in respect of the aforesaid rou tes, for a period of 6 (six) months with FCI’s right to extend the said period b y 3 (three) months, pursuant to which the petitioner submitted its tender in res pect of the route Ex-Railway Siding New Guwahati/FCI FSD Guwahati Complex to FCI FSD Hailakandi via weighbridge. The said tender was issued in 2 (two) bids ten dering system, i.e. technical bid and price bid. The petitioner, however, was f ound to be disqualified in the technical bid, in view of Clause-3 of Appendix-I I read with Note (ii) of the MTF, which was communicated by the Deputy General M anager vide communication dated 4th October, 2010, on the grounds (i) that his p erformance in executing the previous contracts in routes (a) Guwahati-Badarpurgh at for the period from 24th March, 2008 to 23rd March, 2010 extended upto 23rd J une, 2010 and (b) Guwahati to Hailakandi for the period from 28th March, 2008 to 27th March, 2010 extended upto 27th March, 2010, has been poor and his performa nce during the last month of the contract tenure was dismal and almost no trucks were provided against the indents and thus brought the transportation work to a grinding halt, affecting the PDS in general and (ii) that the petitioner has fa iled to deposit the security money despite the notice dated 26th June, 2010, whi ch made the earnest money deposit of the petitioner liable for forfeiture, thoug h his offer for appointment as Transport Contractor from Guwahati-Badarpurghat a nd Guwahati-Ramnagar route pursuant to the NIT Dated 14th February, 2009 was acc epted and accordingly the earnest money deposit stands withheld. Hence, the pre sent writ petition. 3. I have heard Mr. N. Dutta, learned Sr. Counsel for the petitione r, Mr. K.P. Pathak, learned Sr. Counsel for the respondent FCI and Mr. G.N. Sahe walla, learned counsel for the respondent No.10. 4. Mr. Dutta, learned Sr. Counsel for the petitioner referring to v arious communications issued to the respondent FCI as well as the minutes of the meeting held on 22nd August, 2010 with the Contractors’ Federation convened by the respondent FCI, has submitted that the petitioner and other Transport Contra ctors, appointed by the respondent FCI for transportation of the foodgrains from one place to another during the period from 2008-2010, being unable to place th e trucks as against the indents given by the respondent FCI, because of the stri ke in the month of June, 2010, about which the respondent FCI was well aware, th e petitioner cannot be found to be not responsive to the technical bid because o f its failure to provide the trucks during the month of June, 2010, when admitte dly no transport contractors placed any trucks for transportation of the foodgra ins against the indents given by the respondent FCI, which is one of the grounds on which the petitioner has been disqualified in the technical bid. That apart , referring to the Note in Appendix-II of the MTF dated 15th September, 2010, it has been submitted that since poor performance of the contract for the previous period, unless the Transport Contractor is blacklisted, is not the ground for d isqualifying a bidder in the technical bids, the petitioner cannot be disqualifi ed on the aforesaid ground. 5. Relating to the second ground of disqualification, i.e. the forf eiture of the earnest money deposited, it has been submitted by the learned Sr. Counsel that since vide order dated 30th June, 2010 passed in WP(C) No.3682/2010 , the respondent FCI has been directed not to give effect to the communication d ated 26th June, 2010, which interim order has been refused to be vacated vide or der dated 30th July, 2010 passed in Misc. Case No.2181/2010, the respondent FCI cannot disqualify the technical bid of the petitioner on the ground that it has failed to deposit the security money and as such, his earnest money deposit has been forfeited. 6. The learned Sr. Counsel further submits that the petitioner is s ought to be victimized as its Director is the President of the Contractors’ Fede ration, which went on strike, which is evident from the fact that though one fir m, namely, M/s Saikia Trade and Transport Company, which also did not place any truck, pursuant to the earlier transport contract, in the month of June, 2010, b ecause of the strike, it was favoured with the transportation contract vide orde r dated 30th August, 2010, pursuant to the limited spot tender and the petitione r has been sought to be disqualified in the technical bids on the ground that it has failed to place the trucks for transportation of the foodgrains for the mon th of June, 2010. The learned Sr. Counsel, therefore, submits that the contract already awarded in favour of the respondent No.10 pursuant to the aforesaid NIT dated 15th September, 2010 may be set aside and the respondent Corporation may be directed to issue a fresh NIT for awarding such transportation contract. 7. Mr. Pathak, learned Sr. Counsel for the respondent FCI, on the o ther hand, referring to two notices both dated 21st June, 2010 issued by the Gen eral Manager, FCI submits that the writ petitioner though earlier awarded the co ntract for transportation of the foodgrains from Guwahati to Badarpurghat and Gu wahati to Hailakandi, it has failed to supply the trucks for transportation of s uch foodgrains despite the indents issued by the respondent FCI. According to t he learned Sr. Counsel, in respect of the transportation of the foodgrains from Guwahati-Badarpurghat, the petitioner, in the month of June, 2010, against the i ndents to 140 (one hundred forty) trucks, supplied only 3 (three) trucks and in respect of the contracts for transportation of the foodgrains from Guwahati-Hail akandi, it did not even supply any trucks against the indents of 140 (one hundre d forty) trucks, which has ultimately affected the public distribution system an d also the public interest. It has also been submitted by the learned Sr. Couns el that since a contract has been entered into by the petitioner for transportat ion of foodgrains, it cannot refuse to carry out the contract by resorting to st rike thereby jeopardizing the public distribution system. The learned Sr. Couns el, therefore, submits that the petitioner has rightly been disqualified in the technical bid on the said ground. 8. Mr. Pathak referring to the averments made in paragraph 3 of the affidavit-in-opposition as well as in paragraph 5 of the affidavit-in-reply fil ed by the writ petitioner, further submits that though the petitioner was appoin ted as Transport Contractor on the Changsari/ Amingaon/Guwahati to FSD Kolasib r oute, the said contract was terminated on 13th March, 2007 for the petitioner’s failure to perform the contract, which was though challenged in Title Suit No.23 7/2007 and an order of temporary injunction directing the parties to maintain st atus quo was passed on 10th November, 2009, the same, however, has been stayed b y this Court vide order dated 23rd December, 2009 passed in FAO No.19/2009 and h ence the order of termination of the said contract dated 13th July, 2007 stands. The learned counsel, therefore, submits that the performance of the petitioner was not at all satisfactory and it also did not disclose such fact about termin ation of contract in Appendix-II of the MTF. 9. Mr. Pathak, referring to the second ground of disqualification, has submitted that though the petitioner’s bid pursuant to the NIT dated 14th De cember, 2009 for appointment as the regular Transport Contractor from Guwahati-B adarpurghat and Guwahati-Ramnagar routes was accepted and it was informed vide c ommunication dated 17th June, 2010 to deposit the security deposit money and aga in informed vide communication dated 26th June, 2010 to deposit the same within 30th June, 2010, intimating him that in the event of failure to do so, the tran sport contractors would be appointed at the petitioner’s risk and cost, it has f ailed to deposit the security money, which in turn leads to the forfeiture of th e earnest money deposited and as such, the petitioner is found to be disqualifie d in terms of Note-(ii) of Appendix-II of the MTF dated 15th September, 2010. Referring to the aforesaid orders dated 30th June, 2010 and 30th July, 2010 pas sed in WP(C) No.3682/2010, it has been submitted by the learned Sr. Counsel that the order requiring the petitioner to deposit the earnest money has not been st ayed. According to the learned Sr. Counsel, only the proposed action of the res pondent FCI to initiate a fresh process for appointment of the Transport Contrac tors at the risk and cost of the petitioner, because of his failure to deposit t he security money, has been stayed as is evident from the order dated 30th July, 2010 passed in Misc. Case No.2181/2010 arising out of WP(C) No.3682/2010. 10. It has also been submitted by the learned Sr. Counsel that the p etitioner infact has furnished incorrect information in the tender paper submitt ed by him in Appendix-II by stating that no security deposit or earnest money de posit of the petitioner was forfeited by the respondent FCI, though the petition er’s earnest money was forfeited in respect of the earlier contract, which is al so a ground for disqualifying the petitioner in the technical bid. Mr. Pathak f urther submits that there is no discrimination or victimization, as projected by the petitioner, its Director being the President of the Contractors’ Federation . According to Mr. Pathak, the limited spot tender was issued on 23rd August, 2 010 for clearing the stranded food articles and allied materials, wherein the de tailed formalities are not required to be followed. It has been submitted that in such limited spot tender anyone who is willing to transport the foodgrains e tc. is allowed to participate, irrespective of their past performance, as the sa me was for the purpose of clearing the stranded articles and not for appointment of the Transport Contractor as such. The learned Sr. Counsel further submits t hat in any case, the period for which the respondent No.10 has been appointed as transport contractor pursuant to the ad-hoc tender notice dated 15th September, 2010 is going to expire on 5th April, 2011 and as such, awarding of the contrac t in favour of the respondent No.10 may not be disturbed, since it involves the transportation of foodgrains for distribution to the general public. 11. Mr. Sahewalla, learned Sr. Counsel appearing for the respondent No.10, supporting the argument advanced by the learned Sr. Counsel for the respo ndent FCI, has also submitted that since the petitioner’s performance was found to be dismal in respect of the earlier contract and his earnest money deposit wa s forfeited because of his failure to deposit the security money pursuant to acc eptance of its bid in terms of the nit dated 14th December, 2009, the petitioner has rightly been disqualified in the technical bid. It has also been submitted that pursuant to the NIT dated 15th September, 2010, the respondent No.10 has b een appointed as Transport Contractor vide order dated 5th October, 2010, in ter ms of which it is transporting the foodgrains, which may not be disturbed at thi s stage. 12. I have considered the submissions of the learned counsel for the parties and also perused the pleadings as well as the materials available on re cord produced by the learned counsel for the respondent FCI. 13. It is not in dispute that the petitioner was earlier appointed a s Transport Contractor on the routes (i) Guwahati-Badarpurghat for the period fr om 24th March, 2008 to 23rd March, 2010, which was subsequently extended up to 2 3rd June, 2010 and (ii) Guwahati-Hailakandi for the period from 28th March, 2008 to 27th March, 2010, which was also extended upto 27th June, 2010. One of the grounds on which the petitioner has been disqualified in the technical bid, in r espect of the NIT dated 15th September, 2010, is that his performance during the last month of the contract tenure was dismal and almost no truck was provided a gainst the indents and thus brought the transportation work to a grinding halt, affecting the Public Distribution System (PDS) in general. The said position ha s been disputed by the petitioner referring to the certificates issued by the Ar rear Manager of FCI, both dated 29th July, 2010, certifying that the performance of the contractor with effect from 27th March, 2008 to 3rd June, 2010 in respec t of the route Guwahati-Badarpurghat and with effect from 28th March, 2008 to 31 st May, 2010 in respect of the route Guwahati-Hailakandi is satisfactory. It is also the case of the petitioner that during the month of June, 2010, because of the strike by all the transport contractors, the trucks could not be supplied, which was also taken note of in the meeting held on 22nd August, 2010 in the Zon al Office of the FCI and hence the performance of the petitioner in the said mon th cannot be the ground for disqualification in the technical bid. As noticed a bove, the same is disputed by the respondent FCI contending that during the mont h of June, 2010, in respect of the route Guwahati-Badarpurghat against the inden ts of 140 (one hundred forty) trucks, the petitioner made available only 3 (thre e) trucks and in respect of the route from Guwahati-Hailakandi not even a single truck was made available by the petitioner against the indent of 140 (one hundr ed forty) trucks. It is also the contention of the respondent FCI that there be ing a contract between the parties, they cannot take the PDS for a ride by resor ting a strike on the ground that the Apex Court has restrained carrying load in the truck more than the limit prescribed under the provisions of the Motor Vehic les Act and the Rules framed thereunder. 14. It appears that the petitioner was made known by the General Man ager of the FCI vide 2 (two) communications dated 21st June, 2010 (issued on 23r d June, 2010) that it has, in the month of June, 2010, in respect of the route G uwahati-Badarpurghat, supplied only 3 (three) trucks against the indents of 140 (one hundred forty) trucks and in respect of the route from Guwahati-Hailakandi it did not supply a single truck against the FCI indents of 140 (one hundred for ty) trucks. The certificates, both dated 29th July, 2010, issued by the Arrear Manager of the respondent FCI, which are the basis for contending that the petit ioner’s performance in respect of the said contract was found to be satisfactory , being upto 3rd June, 2010 in respect of Guwahati-Bardarpurghat route and 31st May, 2010 in respect of Guwahati-Hailakandi route, those cannot be the basis for recording the finding relating to the performance of the petitioner in the mont h of June, 2010. The petitioner in fact has not disputed the allegation that it did not supply the requisite trucks, pursuant to the contract, in the month of June, 2010 for the aforesaid routes. The petitioner having entered into a contr act for transportation of food-grains etc. for distribution to the general publi c, cannot take the entire system for a ride by resorting to strike that too on t he ground that because of the Apex Court has prohibited carriage of load in a tr uck more than the permissible limit. The petitioner in any case, under the prov isions of the Motor Vehicles Act and the Rules framed thereunder cannot carry lo ad more than the prescribed limit. The petitioner’s action in resorting to the strike and in not providing the required number of trucks, pursuant to the contr act, has adverse effect on the Public Distribution System and also the public in terest. Failure of the petitioner to provide the trucks, pursuant to the contra ct, therefore, is a relevant consideration for the purpose of disqualifying it i n the technical bid, in such type of contract. 15. In a contract, like one involved in the present writ petition, w hich is for transportation of food-grains from one place to another, which is me ant for the public distribution, the Transport Contractor cannot refuse to provi de the trucks for transportation of the foodgrains etc. by resorting to strike, that too on the ground that the Apex Court has prohibited overloading in the tru cks, i.e. prohibiting carrying of load in excess of the limit prescribed under t he provisions of the Motor Vehicles Act and the Rules framed thereunder, thereby jeopardizing the public interest and affecting the PDS, which in turn has the a ffect of depriving the public in general from getting the food-grains to which t hey are entitled to. Such an action on the part of the Transport Contractor bei ng against the public interest, cannot, at all be condoned and can be a relevant consideration for the purpose of disqualification of technical bids of such con tractor, who submitted the bids pursuant to the subsequent NIT. Public interest in such a contract is the paramount consideration. If such a bidder is awarded such a contract there is every possibility of not fulfilling the contractual ob ligations, thereby jeopardizing the entire public distribution system. 16. The contention of the petitioner that another contractor, namely , M/s Saikia Trade and Transport Company though was also defaulted in supplying trucks pursuant