WA 276/2007 BEFORE HON’BLE THE CHIEF JUSTICE HON’BLE MR JUSTICE B.P.KATAKEY IN THE GAUHATI HIGH CCOURT (THE HIGH COURT OF ASSAM, NAGALAND, MEGHALAYA, MANIPUR, TRIPURA, MIZORAM AND ARU NACHAL PRADESH) (WRIT APPEAL NO.276/2007) Rafique Ahmed Mazumder S/o late Haji Ahmed Ali Mazumder Resident of village & P.O. Panchgram District: Hailakandi(Assam). &Appellant.. -Versus- 1.Hindustan Paper Corporation Ltd (A Govt of India Enterprise) Nagaon Paper Mill, Represented by its Chairman-cum-Managing Director, District: Morigaon(Assam). 2.The Deputy General Manager, Hindustan Paper Corporation Ltd (A Govt of India Enterprise) Nagaon Paper Mill, Represented by its Chairman-cum-Managing Director, Kagajnagar, District: Morigaon(Assam). &Respondents. P R E S E N T HON’BLE THE CHIEF JUSTICE HON’BLE MR JUSTICE B.P.KATAKEY For the petitioner : Mr DS Choudhury, Mr D. Borgohain & Mr M. Bora. &Advocates. For the respondents : Mr AK Phookan & Mr J Roy. &Advocates. Date of hearing : 28.11.2007. Date of judgment : 07.12.07 JUDGMENT AND ORDER(CAV) Katakey,J. The appellant filed WP(C) No.2120/2007 challenging the action of the res pondent Corporation in not accepting the tender papers submitted by him pursuant to the Notice Inviting Tender (NIT) dated 26.03.2007, on the ground that the ea rnest money in terms of clause 2.1.3.1 of the NIT by way of demand draft/call de posit receipts issued by any branches of State Bank of India or Canara Bank or C entral Bank of India has not been deposited by him. The said writ petition was d ismissed by the learned Single Judge vide judgment and order dated 19.06.2007 on the ground that the appellant-writ petitioner has violated the condition stipul ated in the NIT. Hence, the present appeal. 2. The facts relevant for the purpose of the present appeal is that a NIT w as floated by the respondent Corporation, which is a Government of India Enterpr ise, on 26.03.2007 inviting bids from reputed and experienced contractors for tr ansportation, bundling and feeding of bamboo for the period up-to 30.06.2009 to be submitted along with the earnest money in the form of bank drafts/call deposi t receipts in favour of the respondent Corporation payable at SBI, Sonakuchi Bra nch or Canara Bank, Jagiroad with a further stipulation that the offer without t he earnest money deposit was liable to be rejected. In the bid documents supplie d to the appellant-writ petitioner, a stipulation has been made regarding the ma nner of deposit of the earnest money. In clause 2.1.3.1 thereof, it has been pro vided that the earnest money is to be deposited in the form of demand draft/call deposit receipt drawn in favour of the respondent Corporation issued by any bra nches of State Bank of India or Canara Bank or Central Bank of India payable at SBI, Sonakuchi, Jagiroad with the further stipulation that the demand draft of a ny associated banks of the SBI shall not be accepted. The appellant-writ petitio ner submitted his bid in a sealed cover pursuant to such NIT enclosing therewith an A/c Payee Pay Order issued by Dena Bank, which is a nationalized bank, drawn in favour of the respondent Corporation for an amount of Rs.5 lakhs dated 16.4. 07 as earnest money deposit. The bid submitted by the appellant-writ petitioner however, has not been considered by the respondent Corporation on the ground tha t the earnest money deposited by the appellant-writ petitioner was not in terms of clause 2.1.3.1. of the bid documents as the Pay Order was not issued by any b ranches of State Bank of India or Canara Bank or Central Bank of India. The said action of the respondent Corporation was challenged by the appellant in the wri t petition as aforesaid. 3. We have heard Mr D.S.Choudhury, learned counsel appearing on behalf of t he appellant as well as Mr AK Phookan, learned senior counsel for the respondent Corporation. 4. Mr Choudhury, referring to the condition stipulated in the NIT dated 26. 3.07 as well as clause 2.1.3.1 of the bid documents has submitted that there is no reasonable basis for stipulating that the demand draft/call deposit receipts issued only by any branches of State Bank of India or Canara Bank or Central Ban k of India is to be accepted towards the earnest money deposit. Such a condition , according to the learned counsel, has no just or reasonable relation to the ob ject of the earnest money deposit. Mr Choudhury has contended that such an unjus t and unreasonable condition is against the mandate of Article 14 of the Constit ution of India and hence, the action of the respondent Corporation in not consid ering the technical and price bid of the appellant on the ground that the earnes t money deposit was made in the form of an A/C Payee Pay Order issued by another nationalized bank, namely Dena Bank, cannot be sustained in law. Mr Choudhury h as further contended that in any case, the condition stipulated in the bid docum ents relating to the deposit of earnest money by way of demand draft/call deposi t issued only by any of the branches of State Bank of India or Canara Bank or Ce ntral Bank of India being not the essential condition but merely ancillary or su bsidiary with the main object of earnest money deposit to be achieved by the con dition, the A/c Payee Pay Order issued by another nationalized bank, namely Dena Bank cannot be treated as the violation of the condition relating to the earnes t money deposit and as such, necessary directions are required to be issued to t he respondent Corporation to open and consider the technical and price bid of th e appellant-writ petitioner in respect of the work tendered for. 5. Mr Phookan, learned senior counsel, per contra has submitted that it is being specifically made known to the intending bidders that the earnest money in the form of bank draft/call deposit issued only from any branches of State Bank of India or Canara Bank or Central Bank of India is to be accepted and there be ing a specific stipulation that the demand draft of any associated banks of SBI shall not be accepted and any bid submitted by any tenderer in violation of such stipulation is liable to be rejected, hence, the action on the part of the resp ondent Corporation in not considering the technical and price bid of the appella nt-writ petitioner cannot be termed as illegal and arbitrary, as the authority i s bond to adhere to the conditions stipulated in the NIT. Mr Phookan has, howeve r, submitted that the respondent Corporation in the subsequent NITs issued for o ther jobs has done away with such conditions relating to the requirement of depo siting the earnest money in the form of bank draft/call deposit only from certai n banks. Mr Phookan has further submitted that no relief can be granted to the a ppellant-writ petitioner in the present appeal as pursuant to the NIT dated 26.3 .07 the contract has already been awarded to another person who is executing the said work and awarding of contract to such person has not been challenged by th e appellant-writ petitioner either in this appeal or by filing any other writ pe tition and such a contractor is also not a party to the proceeding. 6. The question which arises for consideration in the present proceeding is whether stipulation of the condition of making earnest money deposit by way of bank draft/call deposit only from certain banks unjust and unreasonable and it i s a step towards achieving the object of earnest money deposit. The respondent C orporation, in clause 2.1.3.1. of the bid documents has stipulated the manner in which the earnest money is to be deposited. For better appreciation, clause 2.1 .3.1. is quoted below: 2.1.3.1. Earnest Money as mentioned in the NIT is to be deposited in the form of a Demand Draft/Call Deposit drawn in favour of Hindustan Paper C orporation Limited, Nagaon Paper Mill, Kagajnagar and issued from any branches o f State Bank of India/Canara Bank/Central Bank of India and payable at State Ban k of India, Sonakuchi(HPC)(Code: 7699)/ or Canara Bank, Jagiroad(Code: 1436). De mand Drafts of any associated Banks of State Bank of India shall not be accepted . . 7. Admittedly, the appellant-writ petitioner submitted his bid pursuant to the NIT dated 26.3.2007 enclosing therewith an A/c Payee Pay Order drawn in favo ur of Hindustan Paper Corporation Ltd for Rs.5 lakhs issued by a nationalized ba nk, namely Dena Bank, Panbazar Branch at Guwahati. The appellant-writ petitioner ’s bid was classified as defective for not making the earnest money deposit in t he form of an A/c Payee Pay Order issued by any branches of State Bank of India/ Canara Bank/Central Bank of India as stipulated in clause 2.1.3.1 as above. It i s the pleaded case of the respondent Corporation that only because such A/c Paye e Pay Order was not issued from the said classified banks the tender papers subm itted by the appellant-writ petitioner was found to be defective and not for any other reason. The award of a contract whether by a private party or a public bo dy or the State though essentially a commercial transaction and the authority ca n fix its own terms of invitation to tender, the State, its corporations, instru mentalities and agencies cannot put an unreasonable, unjust and arbitrary condit ion in the tender as they have the public duty to be fair to all concerned. The Writ Court in exercise of its power under Article 226 of the Constitution of Ind ia though is required to exercise such power with great caution and in public in terest, can strike down an unjust, unreasonable or arbitrary condition in the NI T. 8. In the instant case, the stipulation relating to the earnest money as qu oted above is that the bank draft/call deposit issued only from any branches of SBI or Canara Bank or Central Bank of India is to be accepted. The respondent au thority has not been able to show any justification or reasonableness in making such stipulation in the bid document and in exclusion of other nationalized bank s. We also find no reason whatsoever for making such classification. Further, th ere is no stipulation either in the NIT or in the bid documents that the demand draft/call deposit issued by any other nationalized bank, except mentioning that such draft/call deposit issued by any associated banks of SBI, shall not be acc epted. The object of making the earnest money deposit being that only such parti es who are financially sound or are sincere and serious in getting and executing the work participate in the tender process, the conditions stipulated in the NI T as well as the bid documents stipulating that the bank draft/call deposit issu ed only by certain banks to the exclusion of other nationalized banks would be a ccepted towards earnest money deposit, cannot be treated to be a step forward to achieve the object of making such deposit. Such condition has, in our opinion, no reasonable basis. Hence, such condition is violative of Article 14 of the Con stitution of India. 9. The respondent Corporation, as submitted by Mr Phookan, has in fact done away with such stipulation in the NIT relating to the earnest money deposit in its subsequent NITs issued for awarding different contracts. 10. Having held so, the normal consequence would have been to direct the res pondent Corporation to consider the technical and price bid of the appellant-wri t petitioner submitted by him pursuant to the NIT dated 26.3.07, but in the inst ant case, such a direction cannot be issued in view of the fact that the writ ap pellant did not challenge such condition before submitting his tender papers. He has in fact knowing fully well such requirement submitted his bid enclosing the rewith a call deposit from a bank other than the banks mentioned in the NIT/bid document. That apart, during pendency of the proceeding before this court the co ntract has been awarded to another person pursuant to the said NIT, as submitted by the learned senior counsel for the respondent Corporation, which has also be en accepted by the learned counsel appearing on behalf of the appellant-writ pet itioner. The person in whose favour the contract has been awarded has also not b een made a party either in the writ petition or in this appeal. For these reason s, we have not dealt with the question as to whether such condition relating to deposit of earnest money is an essential condition for a valid tender. 11. That being the position, no direction can be issued to the respondent Co rporation to consider the technical and the price bid of the appellant-writ peti tioner and hence the decision of the learned Single Judge refusing to issue such direction cannot be interfered with. The writ appeal is accordingly disposed of . No costs.