IN THE HIGH COURT OF JUDICATURE AT PATNA CWJC No.9731 of 2009 NARANG DISTILLERY LIMITED, SITUATED AT NAWABGANJ, POLICE STATION NAWABGANJ, DISTRICT GONDA (UTTAR PRADESH) THROUGH ITS DIRECTOR NAMELY RAJIV MITTAL, SON OF SHRI SATISH MITTAL OF NAWABGANJ, POLICE STATION- NAWABGANJ, DISTRICT- GONDA (UTTAR PRADESH) ….. PETITIONER Versus 01. THE STATE OF BIHAR THROUGH ITS SECRETARY, DEPARTMENT OF REGISTRATION, EXCISE AND PROHIBITION, BIHAR, PATNA 02. BOARD OF REVENUE, BIHAR, PATNA THROUGH ITS MEMBER 03. THE COMMISSIONER OF EXCISE AND PROHIBITION, BIHAR, PATNA 04. K.D. LIQUOR PVT. LTD., THROUGH ITS DIRECTOR, 503-N.P. CENTER, NEW DAK-BUNGALOW ROAD, PATNA 05. PASUPATINATH DISTRIBUTOR’S PVT. LTD. THROUGH ITS DIRECTOR- CHANDI VAYAPAR BHAWAN, F-2, II FLOOR, EXHIBITION ROAD, PATNA-4 ...... RESPONDENTS For the Petitioner:- Mr. Basant Kr. Choudhary, Sr. Advocate & Mr. Rajiv Prashant, Advocate For the State:- Mr. P.K. Shahi, Advocate General & Mr. Vikas Kumar, A.C. to A.G. For the Respondent Nos. 4 and 5:- Mr. Satyabir Bharti, Advocate ----------- 09 19.05.2010 Heard learned counsel for the petitioner, learned Advocate General for the State and learned counsel for private respondents no. 4 and 5. A tender notice dated 29.5.2009 was published by the Excise Department of the State Government for supply of spiced country liquor in bottles or satches by suppliers and/or manufacturer for the period 1.8.2009 to 31.3.2012. The petitioner was also one of the applicants. Its 2 tender offer has been rejected by communication dated 24.07.2009 and which is presently under challenge. Clause- 5 (IV) and 5 (IV) (C) of the tender notice translated into English read as follows:- “It shall be necessary for the tenderer to annex the following current certificates along with the tender, failing which the tender shall not be considered.” “Clause -5 (IV) (C)- A character certificate in respect of the business carried on from the District Magistrate, in original, issued after the date of tender. In the case of a registered firm or company, such character certificate was not required, but a certificate from the competent officer (Registrar of Companies) in original was required to be submitted to the effect that the company was not under liquidation and was functioning. The certificate, in original, must have been issued after the date of the tender notice”. Learned counsel for the petitioner contends that the petitioner had submitted a certificate issued by its Chartered Accountant to that effect based on a web copy downloaded from the internet site of the Registrar of Companies, Kanpur. It showed the petitioner was an active 3 company signifying that it was not under liquidation. Further, a certified copy issued by the office of the Registrar of Companies certifying that annual return had been filed by the company in Form 20B of the Companies Act, dated 29.9.2007 was also submitted. It again demonstrates that the company was active and not under liquidation. It was next urged that the petitioner had also furnished a copy of its Excise license, granted by the State of Uttar Pradesh, for the year 2009-10 dated 8.6.2009, which again went to prove that the company was active and not under liquidation. The submission therefore was that all these documents were collectively supportive of the fact, pointing in one direction only, leading to an irresistible conclusion that the company was functional and not under liquidation. In context of another tender for supply of country liquor only, the same kind of documents suggestive of the petitioner being an active company not under liquidation, with similar stipulations in the tender notice, was accepted by the respondents State waiving the requirement for a original certification from the Registrar of companies. It was fairly contended that though this may not per se vest a legal right in the petitioner, nonetheless it was suggestive of the fact that the 4 respondents could waive the condition at their discretion and therefore it was not mandatory. It was brought to our attention that however, this tender for supply of country liquor, separate from the present, of the petitioner, was rejected for another reason and which is presently the subject matter of litigation. Reliance was placed on A.I.R. 1991 SC 1579 (M/S. PODDAR STEEL CORPORATION VERSUS M/S. GANESH ENGINEERING WORKS AND OTHERS) to urge that conditions of the tender which do not materially affect the tender can be waived at the discretion of the authorities and there was no error in the authority not insisting upon rigid compliance of the same invoking doctrines of waiver. Reliance was further placed on A.I.R. 2007 SC 437 (M/S B.S.N. JOSHI & SONS LTD. V. NAIR COAL SERVICES LTD. & ORS.) to submit that relying upon the case of M/s. Poddar Steel Corporation (supra) the conclusion has again been arrived at paragraph 71 that there was a general power of relaxation, which could be exercised in award of tenders if, the offer materially satisfies the requirements of the conditions of the notice inviting tender. Learned Advocate General, appearing for 5 the State submitted that the tender notice itself stipulated in Clause 5 (IV) read with Clause 5 (IV) (C) that the condition to furnish a current certification, issued by the Registrar of company, after the date of the tender notice, in original, that the company was functioning and was not under liquidation, was a mandatory requirement. Non- compliance would render the offer liable to rejection outright as an incomplete tender. The petitioner does not dispute or deny that he did not fulfill this condition. The other tenderers had submitted the documents in terms of the tender notice including from the Registrar of Companies. If the respondents had accepted incomplete tenders they would have to start a roving enquiry based on the supporting or suggestive documents furnished by the petitioner to ascertain and decipher whether the petitioner was a functioning company or under liquidation. All this, while the respondents had other valid offers for consideration available. The submission therefore was that supportive document does not fulfill the condition of the advertisement. The objects and purpose of the condition was to ensure that the respondent had a continued and uninterrupted supply of spiced country liquor during the term of the tender period. The respondents would not find 6 themselves embroiled in unnecessary issues destroying their entire planning. It was lastly submitted that an annual return filed by a company may not necessarily be suggestive of a functioning company as statutory returns were an obligation under the Companies Act, till winding up, even if the company was not in production. Learned counsel for the petitioner has very fairly submitted that he does not question the award of tender to the respondents no. 4 and 5, as in his submission the State has adequate need apart from them, if it so desires to award the contract to the petitioner additionally. The tender in question related to business in country liquor. That shall primarily distinguish the present case from other case laws on tenders. The petitioner cannot urge that any vested right of his has been violated by denial of consideration to deal with the respondents in the trade of liquor. There are no allegations of arbitrariness or discrimination. It would require an absolutely inappropriate conduct on part of the respondents, completely violative of the tender conditions, to infer any benefit in favour of the petitioner. Such does not appear to be the case presently. Clause 5 (IV) of the tender notice explicitly 7 provides that it was obligatory for the tenderer to submit a current document issued after the date of tender by the Registrar of company, in original, that the company was functioning and not in liquidation. Had the tender notice stopped at that only, there may or may not have been an occasion to consider the impact of the suggestive documents furnished by the petitioner. The Clause however reads on further to provide the consequence of not furnishing of such a document to unequivocally state that such tender shall not be considered. The consequence having been provided for in the tender condition itself, it is not for us to read something more into it then what the tender notice itself provides for. The condition was clearly mandatory. The Court upholds the contention of the State that the mandatory condition in the tender notice to the extent was guided by a purpose and policy to ensure that the respondents were entering into a contract with a company which would ensure uninterrupted supply to them during the period of the contract. The supplier would not end up in disruptive supply and further complications during the period of the contract for reasons attributable. This condition imposed cannot by any stretch be considered arbitrary or irrational. We have already 8 held that the condition was mandatory, and in absence of any relaxation Clause contained in the tender notice, no mandamus can be issued by us to relax the condition of the tender in a manner urged on behalf of the petitioner. The fact that absence of regular supply of authenticated country liquor, or a disrupted supply, may lead to hooch products endangering human lives cannot be ignored. The case of M/s. Poddar Steel Corporation (supra) relied upon on behalf of the petitioner, the facts were that it was a mandatory condition of the tender for deposit of Rs. 50,000/- as earnest money. The challenge was that it had not been complied with inasmuch as the bankers Cheque furnished was not from the State Bank of India as stipulated, but from the Union Bank of India. It is apparent from paragraph 3 of the said judgment that before accepting the tender, it was confirmed from the Union Bank of India, which stood by the Bankers Cheque for its encashment which was as good as cash. In that background, the conditions of a tender were described as consisting of two parts, the essential and the non-essential. The essential part of a cheque could not be waived, whereas the non- essential part, could be relied upon to accept the 9 tender on the theory of substantial compliance and not literal compliance. To our mind the distinction lies in the fact that a Bankers Cheque had been submitted confirmed from the Union Bank of India as encashable and which primarily weighed with the Court in coming to the conclusion that the relaxation granted for acceptance was not arbitrary or irrational. There did not appear to be any stipulation that failure to submit a Cheque as provided in the tender would result in rejection of the tender outright. We are not persuaded with the reliance on the case of B.S.N. Joshi (supra) as on the facts of the present case, we find it difficult to hold that the supporting documents, furnished by the petitioner substantially satisfied the requirements of the tender notice. It is the case of the petitioner themselves that these documents though not meeting the conditions of the tender notice were suggestive of the fact. The learned Advocate General, had rightly submitted that if, they were only suggestive, surely it was a matter of fact requiring enquiry from various sources, defeating the very purpose of the tender condition. In 2005 (4) SCC 435 (GLOBAL ENERGY 10 LTD. AND ANOTHER VERSUS ADANI EXPORTS LTD. AND OTHERS) the supreme Court has held as follows at paragraph 10:- “10. The principle is, therefore, well settled that the terms of the invitation to tender are not open to judicial scrutiny and the courts cannot whittle down the terms of the tender as they are in the realm of contract unless they are wholly arbitrary, discriminatory or actuated by malice. This being the position of law, settled by a catena of decisions of this Court, it is rather surprising that the learned Single Judge passed an interim direction on the very first day of admission hearing of the writ petition and allowed the appellants to deposit the earnest money by furnishing a bank guarantee or a bankers’ cheque till three days after the actual date of opening of the tender. The order of the learned Single Judge being wholly illegal, was, therefore, rightly set aside by the Division Bench.” In 2001 (6) SCC 46 (RAJSEKHAR GOGOI VERSUS STATE OF ASSAM AND OTHERS) the question being considered was the rejection of a tender offer for grant of license for a country liquor shop. Clause 11 of the form of tender read as and it was replied as follows:- “11. Whether the tenderer will be capable of financing his business himself. Give details of source: cash in hand, bank balance, security, assets etc.” In answer, Respondent 4 stated as under: “Yes, I am financially 11 capable enough to run the business. I shall get financial assistance in this respect from my father and also from my sister and sister’s husband.” The supreme Court at paragraphs 10 and 11 of the judgment in that context rejecting the challenge held as follows:- “10. This clearly shows that it was imperative for a tenderer to furnish full information as required so that the same could be verified by the Deputy Commissioner or any other authorized person “before settlement of shop to the tenderer” (emphasis added). In the present case, such an opportunity was clearly denied to the authorities when Respondent 4 had not furnished the requisite particulars along with her tender. 11. We are, therefore, of the opinion that as the tender itself of Respondent 4 was liable to be rejected because of lack of particulars as stated hereinabove, no further question arises. We do not agree with the observation of the High Court that Rule 206 is not mandatory. The language of the said Rule is clear and unambiguous. It not only says that the tenders must be in their required form but also stipulates the consequence of non-compliance thereto, the consequence being that the tenders not containing all the particulars “shall be liable to be rejected.” If the respondents have allegedly acted contrary to their own conditions provided for in another tender by waiving the same, we do not think that Article 14 can be pressed into the service by the petitioner to urge that the wrong committed 12 by the respondents in another tender between the same parties must be carried forward and the same relief be given to the petitioner presently. The law stands settled that Article 14 does not operate in the negative to demand perpetuation of an illegality. Learned counsel for the petitioner therefore rightly urged that this per se did not vest a legal right to demand acceptance of the tender. Having considered the matter in all its aspects, the Court finds it difficult to arrive at a finding of any illegality in the order dated 24.7.2009 warranting interference. The writ petition is dismissed. P.K. (Navin Sinha, J.) (Dinesh Kumar Singh, J.)