IN THE HIGH COURT OF JUDICATURE AT PATNA CWJC No 17562 of 2008 Ratan Sharma, S/o Sri Vijay Kumar Sharma, R/o Mohalla - Sikandarpur, P S - Muzaffarpur Town, Dist - Muzaffarpur -Petitioner Versus 1 Managing Director, Bihar State Food & Civil Supply Corporation, Sone Bhawan, 5th Floor, Vir Chand Patel Path, Patna 2 District Magistrate, Dist - Muzaffarpur, Bihar 3 District Manager, State Food Corporation, Muzaffarpur 4 District Food and Supply Officer, Muzaffarpur, Dist - Muzaffarpur -Respondents *** For the petitioner : Mr Prabhat Ranjan, Advocate For the respondents-Corporation : M/s R S Pradhan, Sr Advocate & A N Rai, Advocate *** 8 13.04.2009 It is not in dispute that the Bihar State Food and Civil Supplies Corporation had issued a tender for appointment of transporting agent in respect of Muzaffarpur region. In that tender, apart from others, petitioner also participated. While filing tender, petitioner was required to submit earnest money of Rs 1 lakh which was duly deposited. It appears while the petitioner was waiting for finalization of his tender, he suddenly came upon another similar tender being issued but as neither cancellation of his earlier tender nor refund of earnest money was communicated to him, he waited for his tender to materialize and did not apply in the second tender, only to find that the second tender was then settled with a person for a rate on which another tender’s tender had been rejected as uneconomic. In the counter affidavits filed, these basic facts are not in dispute. It is stated that if a tender is cancelled, it is not the practice of the Corporation to communicate its decision to the tenderers nor it is the practice of the 2 Corporation to suo motu return the earnest money. The refund of earnest money is done when a person demands the same. That, in my view, is begging the question. Before a person can demand refund of earnest money, he must be told that the earnest money is refundable as a consequence of cancellation of tender but it is not held a cancellation of earnest money where is the question of a person demanding return of earnest money. Apparently all this is only to delay refund of earnest money and holding money but those facts are besides the point in issue. The issue is that the petitioner is discriminated against by depriving him chance to participate in the second tender. As pleadings are complete, with consent of parties, the writ petition is being disposed of at this stage itself. The facts, not being in dispute, I have no hesitation in holding that the actions of the Bihar State Food and Civil Supplies Corporation is arbitrary on the face of it. Once they invite tender and take deposits of huge amounts of money as earnest money, for any reason, if they decide to cancel the tender then it is incumbent upon them to communicate the decision to the tenderers immediately and to simultaneously, immediately, refund the earnest money. Once the tender for which earnest money is deposited is cancelled, the Corporation’s action in holding back the earnest money would be mala fide. It has no gainsaying that they can withhold it till a person comes to claim its refund. That is not the legal requirement. It is an obligation on the Corporation to refund the same suo motu no sooner decision to cancel the tender is taken. 3 In the facts of the present case, it is not in dispute that petitioner had validly tendered for the first tender alongwith earnest money of Rs 1 lakh. He was not communicated the cancellation of tender. In fact when the financial bids were being looked into some of the tender papers of their tenderers were rejected. Even at that stage, it was not disclosed that the tender itself may be cancelled or was being contemplated to be cancelled. Rather one of the tenders of another was rejected on the ground that the rate quoted by him were uneconomic and could not be entertained at all. After all this exercise, petitioner waited for finalization of the tender. As noticed above, without informing of the decision setting aside the tender, fresh tenders were issued. The defence of the Corporation that it was not the practice of the Corporation to inform the tenderer cannot save the Corporation in this manner. On the face of it, the practice, adopted by the Corporation, is not in public interest. It is arbitrary and it is against the law. Once the tender is to be cancelled, public law responsibilities require a public institution like the Corporation to inform the public about its decision. It cannot back itself upon practices which are arbitrary and put them forward as an excuse for their per se arbitrary action. The plea of the petitioner is reasonable, plausible and right. Petitioner, not having been informed of cancellation of tender rather having known that the selection process was going on by elimination of certain tenderers, had a legitimate right to wait for finalization or communication of cancellation of all tenders. While waiting, it was not expected of him to participate in another similar tender. Had he been informed that his earlier tender 4 stood cancelled and his earnest money refunded, he would surely have participated in the second tender. By the action of the Corporation, petitioner has been wrongly deprived of his right to participate in the tender. He has thus suffered hostile discrimination because of grossly arbitrary action on part of the Corporation. All of which is contra Article-14 of the Constitution. Thus found, I have no option but to hold that the second tender notice and the entire selection process was itself vitiated. Thus, I am left with no option but to set aside the second tender and the selection process, as adopted therein. Learned counsel for the respondent-Corporation submits that there is an interlocutory application pending on behalf of petitioner for addition of parties. Those are persons who had participated in the second tender and/or allotted the work in the second tender before any interim order could be passed by this Court. In my view, as the second tender notice itself and the entire process has been held to be violative of Article-14 of the Constitution, that I A becomes infructuous. I may only note one thing. It is not only to this extent that the authorities of the Corporation have acted arbitrarily, it virtually remains now admitted that while tender of a person is rejected in the first tender on the ground that the rate quoted by him was uneconomic and not feasible, the same rate, quoted in the second tender by another person, was taken to be the lowest rate and his tender was accepted. Once his tender was accepted, he showed his reluctance to carry on the work. It is also not in dispute that as per Annexure-I to the counter affidavit to the I A, it is stated that 5 the selected tenderer wanted to withdraw but has been threatened to stay in business of threat of being black listed. He is the person who quoted the rate which earlier the Corporation had held to be uneconomical but on the second round, accept it. These are matters of concern. Thus, the writ petition is allowed. The second tender in relation to the appointment of transporting agent for Muzaffarpur region as advertised and finalized by the Corporation stands vitiated and is quashed accordingly. The Corporation would be at a liberty to now issue fresh tenders in the matter after refunding the earnest money to all the applicants and parties concern. M.E.H./ (Navaniti Prasad Singh)