1 BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED: 04.11.2011 CORAM THE HONOURABLE MR.JUSTICE V.RAMASUBRAMANIAN W.P(MD)NO.6279 of 2011 and M.P(MD) Nos.1, 2 & 3 of 2011 Poovammal ... Petitioner Versus 1.Tamil Nadu Civil Supplies Corporation, Rep. By its Managing Director, 12, Thambusamy Road, Kilpauk, Chennai – 600 010. 2.T.Lawarence ... Respondents PRAYER : Writ petition is filed under Article 226 of the Constitution of India praying to issue a Writ of Mandamus, to direct the first respondent to reject the tender submitted by the second respondent in respect of the contract for Transportation of Essential Commodities from FCI Depot to Tamil Nadu Civil Supplies Corporation storage point for the period from 01.07.2011 to 30.07.2011 and further directing the first respondent to finalize the tender after considering the tender submitted by the petitioner as a tender submitted by a qualified contractor. For Petitioner : Mr.S.S.Sundar For R - 1 : Mr.M.Govindan Special Government Pleader For R – 2 : Mr.R.Anand O R D E R The petitioner has come up with the above Writ Petition seeking a Mandamus, directing the first respondent to reject the tender submitted by the second respondent and to consider her own tender, in respect of a contract for Transportation of Essential Commodities from FCI Depots to the storage points of the Tamil Nadu Civil Supplies Corporation for the period from 01.07.2011 to 30.06.2012. 2. Heard Mr.S.S.Sundar, learned Counsel for the petitioner, Mr.M.Govindan, learned Special Government Pleader for the first respondent-Corporation and Mr.R.Anand, learned Counsel for the second respondent. 3. The Tamil Nadu Civil Supplies Corporation which is the first respondent herein, issued a notice inviting tender for Transportation of Essential Commodities from FCI (Food Corporation of India) depots to https://hcservices.ecourts.gov.in/hcservices/ 2 TNCSC storage points for the period from 01.07.2011 to 30.06.2012. The notice inviting tender was published in the Newspaper on 20.04.2011, indicating that in respect of Virudhunagar and Tirunelveli region, the sale of tender forms would be closed by 04.00 p.m on 30.05.2011 and that the tender forms had to be submitted before 11.00 a.m on 31.05.2011. The notice also indicated that the tenders will be opened by 12.00 noon on 31.05.2011. 4. Accordingly, Part-I, Technical Bid was opened first at the Head- office on 31.05.2011 and three persons by name T.Lawarence, N.Kumaresan and Ashok Transport were found to have qualified in the Technical Bid for participating in the opening of Part-I price bid. Though the petitioner was one of the persons who had submitted a tender, the first respondent did not accept the petitioner as having been qualified in the Part-I Technical Bid. 5. Therefore, aggrieved by the rejection of her tender even at the stage of Part-I Technical Bid, the petitioner has come up with the above Writ Petition seeking a Mandamus with two prayers namely (i) to consider her tender and (ii) to disqualify the second respondent herein. 6. On 16.06.2011, this Court ordered notice of motion in the Writ Petition and also passed an interim order staying the confirmation alone. Thereafter, the respondents filed counter-affidavits as well as vacate stay petitions. When the vacate stay petitions came up for hearing all the learned Counsel agreed to argue the main Writ Petition itself and hence, it was taken up for disposal. 7. As pointed out earlier, the prayer of the petitioner is actually two fold namely (i) to consider her as qualified for participating in the tender and (ii) to consider the second respondent as not qualified. Therefore both these aspects require consideration. Qualification of the petitioner:- 8. The petitioner has been found by the first respondent to be disqualified from participating in the tender, only on one ground namely that along with the original R.C.Books that she produced to prove the ownership of 10 lorries prescribed as the minimum eligible criteria, the petitioner produced the fitness certificates in original in respect of 9 lorries and produced only the xerox copy of the fitness certificate in respect of the tenth lorry. 9. Though neither the paper notification, dated 20.04.2011, nor the tender document makes it very explicit that a person who owns atleast 10 lorries alone will be eligible to participate in the tender, there are indications in the tender document that such a qualification is required for a person to be eligible for consideration. For instance, the first part of the tender document contains an application form in a particular format. Serial No.10 of the said format directs the applicant to give details of lorries owned. The second part of the tender document contains the Terms and Conditions. 10. Clause III under para 02 of the Terms and Conditions reads as follows:- https://hcservices.ecourts.gov.in/hcservices/ 3 “III. Xerox copies of the RC Books to prove ownership of 10 lorries in the name of the tenderer or firm. Tipper vehicles will not be considered for qualification. Lorries must be under the registration of Tamil Nadu. Other State registration lorries should not be produced. The contractor should not change the ownership/transfer the name of the lorries during the currency of the contract period, without prior permission of T.N.C.S.C. Original R.C Books should be produced at the time of opening of Tender. Otherwise the tender will be summarily rejected.” 11. Clause 8(d) of the Terms and Conditions also speak about 10 lorries and it reads as follows:- “All the above ten lorries should be placed at the disposal of the Corporation to commence movement daily unless there is case of accident or the vehicle sent for FC owned and leased lorries have to be deployed failing which penalty of Rs.250 per day will be levied. A sum of Rs.250/- (Rupees two hundred and fifty only) will be levied as penalty per day/per lorry towards non-supply of lorries or short supply of lorries as required by the Regional Managers/Senior Regional Managers.” Therefore, it is admitted on both sides that to be eligible for participating in the tender, a person should own atleast 10 lorries. 12. The requirement under Clause III of para 02 of the Terms and Conditions, is only to submit, along with the tender, xerox copies of the R.C Books to prove the ownership of 10 lorries in the name of the tenderer. In other words, the tenders should be accompanied only by xerox copies of R.C Books. But, at the time of opening of the tender, the original R.C Books are required to be produced for the purpose of verification. If a person is unable to produce the original R.C Books, the tender submitted by him is liable to be rejected summarily. 13. In all places namely (i) Serial No.10 of the application form which forms part of the tender document (ii) Serial No.3 of the check list for qualification bid enclosed to the application form and (iii) Clause III of para 02 of the Terms and Conditions, the expression used in the tender document is “R.C Books”. Nowhere is it prescribed in the tender document that the R.C Books should be accompanied by the original fitness certificate. But the first respondent has considered the petitioner as not qualified for participation in the tender, only on the ground that in respect of one lorry out of 10 lorries, the R.C Book was accompanied only by a xerox copy of the fitness certificate. But it is admitted that in respect of 9 lorries, the petitioner had produced not only the original R.C Books but also the original fitness certificates. 14. It is nobody's case that the petitioner did not have the original fitness certificates. As a matter of fact, the petitioner has claimed in the affidavit in support of the Writ Petition that the original fitness certificate was not unfortunately stapled along with the original R.C Book in respect of one lorry alone and that when it was pointed out, her son requested time to produce it. https://hcservices.ecourts.gov.in/hcservices/ 4 15. It is the contention of the first respondent as well as the second respondent that a R.C Book unaccompanied by a original fitness certificate is invalid in the eye of law. In support of the said contention, the learned counsel for the second respondent relied upon Section 56(1) of the Motor Vehicles Act, 1988. As per Section 56(1), a transport vehicle shall not be deemed to be validly registered, for the purpose of Section 39, unless it carries a certificate of fitness in such form as may be prescribed by the Central Government. Therefore, it is contended by the learned Counsel for the second respondent that the non- availability of fitness certificate would make the registration itself come within the deeming fiction under Section 56(1). In other words, the vehicle in respect of which a fitness certificate was not produced, will be deemed to be not validly registered at all. 16. But the said contention is misconceived, in my opinion. The requirement under Section 56(1) of the Motor Vehicles Act, 1988, is actually in respect of the vehicle and not in respect of the R.C Book. A vehicle will not be deemed to be validly registered if it does not carry a fitness certificate. The non production of the fitness certificate, in respect of a vehicle which actually has a fitness certificate, will not make the R.C Book in respect of that vehicle, an invalid and ineffective document. In other words, the crucial question is as to whether a vehicle has a certificate of fitness or not. If the vehicle actually has one, the mere non-production of a fitness certificate would not make the R.C Book itself, an invalid document in the eye of law. 17. The Terms and conditions contained the tender document, do not make it explicit that the R.C Book should be accompanied by a fitness certificate or an insurance policy. The bare requirement, under the tender document, is only to produce the original R.C Books. 18. Therefore, the first respondent ought not to have put against the petitioner, something which is not clearly spelt out in the tender document. If what is spelt out in the tender document is not produced, then there is no doubt that such a person would be disqualified. If a certificate of fitness is deemed to be required to be produced by virtue of an interpretation to a tender condition, then the benefit of doubt should go to the participants in the tender process. To put it differently, if the words “R.C Book” repeatedly appearing in many parts of the tender document is possible of being interpreted, so as to include within its fold, the fitness certificate, then the benefit of non- production of the same, on account of another possible interpretation, should go to the petitioner. Therefore, the rejection of the Technical Bid of the petitioner, without even giving him an opportunity to produce the original of the FC in respect of one lorry, is highly arbitrary, especially when the petitioner has produced the original FC's in respect of 9 lorries along with original RC Books. Qualification of the second respondent:- 19. Coming to the acceptance of the Technical Bid of the second respondent, the objection of the petitioner is that out of 10 lorries that the second respondent owned at the time of submission of tender, he had already leased out 8 lorries to another party by name Ashok Transport. As a matter of fact, the Technical Bid of the said Ashok https://hcservices.ecourts.gov.in/hcservices/ 5 Transport has also been accepted in this very case. Therefore, it is the contention of the petitioner that the second respondent did not satisfy the essential requirement prescribed in terms of Clause 8(d) of the Terms and Conditions which I have extracted in a previous para. 20. As seen from para 8(d) extracted earlier, a person who participates in the tender, should place all the 10 lorries at the disposal of the Corporation to commence movement daily. Though there is some ambiguity in the tender document about whether all the 10 lorries should be owned by the tenderer, there is no ambiguity at least with regard to the condition that all the lorries should be placed at the disposal of the Corporation. 21. If we again go back to the tender document, it is seen from Serial No.10 of the application form which is contained in Part-I of the tender document, that the tenderer is required to furnish details of 10 lorries owned by him. The application form, therefore, gives an impression as though all the 10 lorries should be owned. Similarly, the check list for qualification bid contained in para 4 of the application form, also contains an indication against Serial No.3 as though the xerox copies of R.C Books for owning minimum 10 lorries in the name of the tenderer should be enclosed. Therefore, the first part of the tender document gives an impression that atleast 10 lorries should be owned by the tenderer in his name. Even, Clause III of para 02 of the second part of the tender document which contains the Terms and Conditions, stipulates that the tenderer should prove ownership of 10 lorries. There is also a stipulation therein that the contractor should not change ownership during the currency of the contract period. 22. However, in para 8(d), which mandates all the 10 lorries to be placed at the disposal of the Corporation, there is some indication as though even leased lorries may be taken into account. I do not know whether this para 8(d) virtually dilutes the earlier part. Any way, I am not concerned with a case where a tenderer owns only a few and has taken on lease the rest of the lorries. 23. In this case, the objection is that on the date of tender, the second respondent owned 10 lorries, but had given 8 lorries on lease under registered agreement to one Ashok Transport. This averment is not denied by the second respondent. On the other hand, the contention of both the respondents is that there is no prohibition for a person who owns 10 lorries but who had leased out some or all of them, to participate in the tender. According to the respondents, the tender document does not impose a condition anywhere that the tenderer should not have leased out any or all of his lorries to third parties. According to them, it is enough if the tenderer is able to make all the 10 lorries available at the disposal of the Corporation, at the time of commencement of movement. 24. But the above interpretation sought to be given by the first respondent, is simply shocking. If a person who owns 10 lorries had already leased out any or all of them, the ability of such a person to make available all the 10 lorries at the disposal of the Corporation, https://hcservices.ecourts.gov.in/hcservices/ 6 gets curtailed by the Terms and Conditions of the lease. Such a person will not be able to make all the 10 lorries available at the disposal of the Corporation, except at the mercy of the lessee. As a matter of fact, the petitioner has produced the lease agreements entered into by the second respondent with M/s.Ashok Transport. 25. Interestingly, when I questioned as to how the petitioner got possession of the lease agreements entered into by the second respondent with Ashok Transport, the learned Counsel for the petitioner submitted that Ashok Transport was a tenderer for another contract with Tamil Nadu Ware Housing Corporation. In that tender the lessee Ashok Transport had relied upon these very lease agreements, for participating in that tender. It is the very same Ashok Transport, whose Technical Bid had been accepted in the present case also. 26. The above position in fact, creates an anomaly, if the interpretation given by the first respondent is accepted. The anomaly is that both the lessor and the lessee can show the very same lorries, before the very same Corporation, for the very same tender or before more than one Corporation for various tenders. If this is permitted, para 8(d) of the Terms and Conditions would be rendered otiose. Therefore, the interpretation sought to be given by the respondents can never be accepted. 27. The interpretation sought to be given by the respondents reminds me only of what happened in the case of appointment of lecturers in self- financing Engineering and Medical Colleges. Persons possessing Post Graduate and Doctorate Degrees in Engineering or Medicine, lent their names and certificates to various self-financing Colleges at the same time to enable them to obtain affiliations. At last the AICTE and MCI took note of the same and imposed certain restrictions. 28. In other words, the same lorries cannot take different avathars, one for the purpose for making the lessor eligible to participate in the tender and another for making the lessee also eligible to participate. If this is permitted, the very purpose of prescribing atleast a minimum ownership of 10 lorries gets defected. 29. I should also take note of the condition prescribed in Clause III of para 02 which stipulates that a contractor should not change the ownership or transfer the name of the lorries during the currency of the contract period. Any transfer of interest in the lorry, in the form of a lease, if prohibited after the grant of the contract, should also be taken to be prohibited before the award of the contract. Therefore, I find that the acceptance of the Technical Bid of the second respondent is also faulty. 30. Mr.R.Anand, learned Counsel for the second respondent relied upon the decision of Mr.D.Hariparanthaman.J., in Writ Petitions in W.P.Nos.13573 & 13574 of 2011, dated 08.07.2011, in which the contract awarded to the very same second respondent was unsuccessfully challenged by another person. That contract was for movement of goods from non FCI godowns. The contract which forms the subject matter of this Writ Petition is for movement of goods from FCI godowns. Therefore, relying upon the said decision which was also confirmed by the Division Bench in https://hcservices.ecourts.gov.in/hcservices/ 7 Writ Appeals in W.A.Nos.1288 & 1289 of 2011, dated 15.09.2011, the learned Counsel for the second respondent contended that the issue is no longer res integra, atleast insofar as this contract is concerned. 31. But with great respect, it is to be pointed out that the question as to the interpretation to be given to Clause III of para 02 and para 8(d) of the tender document, was not dealt with in the said decision. The interpretation to be given to these clauses, was not considered in the said decision. Whether the mere paper ownership of 10 lorries without the owner having any control over any of them on account of the registered lease agreements, was sufficient compliance with the tender conditions, was not considered in the said decision. 32. It is needless to point out that a decision is an authority only for what it decides and not for what follows out of the same as a consequence. If a point of law is raised, but not considered in a judgment, the judgment cannot be taken to be an authority on the point. As pointed out in para 155 of the judgment of the supreme Court in Southern Petrochemical Industries Company Limited Vs. Electricity Inspector, 2007 (5) SCC 447, “a decision is not an authority on a point which has not been considered.” Therefore, the aforesaid decisions cannot make me close my eyes to the wrong interpretation sought to be given to Clause III of para 02 and para 8(d) of the tender document. 33. The learned Counsel for the second respondent contended that even the petitioner will not be able to make available all the 10 lorries owned by her in view of the fact that she had bagged a contract in the Tamil Nadu Ware Housing Corporation. This averment has come up only in the form of an additional affidavit. 34. However, the above contention of the second respondent is refuted by the learned Counsel for the petitioner on the ground that insofar as the contract with the Tamil Nadu Ware Housing Corporation is concerned, there is no requirement to place all the vehicles at their disposal and that the vehicles are required only at particular intervals. 35. But the contention of the second respondent in this regard, in my opinion, does not merit acceptance. This is due to various reasons. The reasons are as follows:- “(a) The tender document floated by the first respondent in this case does not prescribe a condition that a person who has entered into a contract with any other Corporation, is disqualified from applying for this contract. Therefore, a condition which is not found anywhere in the tender document or a condition which cannot even be traced to an existing condition, cannot be now imposed either by the first respondent or raised as a defence by the second respondent. (b) the first respondent-Corporation did not reject the tender of the petitioner on the above ground. If the first respondent has rejected the Technical Bid of the petitioner on that ground, then it would fall for the consideration of this Court. So long as the first respondent has not taken objection to the same, I cannot accept it. https://hcservices.ecourts.gov.in/hcservices/ 8 (c) In addition, the qualification of a person has to be decided with reference to the date of the tender document. Even according to the second respondent, the contract awarded to the petitioner by the Ware Housing Corporation was subsequent to the tender floated by the first respondent. Therefore, a post facto event, cannot disqualify the petitioner. (d) Assuming for a minute that the petitioner had a contract with the Ware Housing Corporation on the date of applying for the contract in question, he would only be guilty of creating a double impact by showing the same lorries to TNWC as well as to the first respondent-Corporation. But the second respondent would be guilty of the same position four times inasmuch as he and his lessee would both show the same set of lorries to two Corporations. Therefore, if the petitioner is guilty of showing the same lorries twice, the second respondent would be guilty of showing it four times. This does not really advance the case of the second respondent. Therefore, on all the factual issues, the petitioner is entitled to succeed. However, let me now move on to the legal issues raised. 36. In Ramana Dayaram Shetty vs. The International Airport Authority of India and others, AIR 1979 SC 1628, the Supreme Court held that the conditions laid down in the tender, should be tested objectively and not subjectively. Now, it is too late in the day to question the jurisdiction of this Court, to test the manner in which a tenderer was dealt with, in the matter of award of contract, by the State or an instrumentality of State. Once it is found that the tender submitted by a person was rejected in an arbitrary and unreasonable manner and once it is also found that the tender of a person who did not satisfy a condition (such as the one in para 8(d)) was accepted, the Court cannot shut its eyes, as pointed out by the Supreme Court in para 34 of its decision. 37. In Sangeeta Singh Vs. Union of India and Others, AIR 2005 SC 4459, a challenge was made to the grant of dealership of Petroleum products, on the ground that the relatives of persons to whom dealership was granted, also had dealership in the same or other public sector undertakings. In defence it was contended that those relatives did not come within the enumerated prohibited category. To be precise, the Terms and Conditions stipulated that if the daughter-in-law held dealership then the father-in-law was disqualified. The High Court set aside the orders granting dealership and the matter landed up before the Supreme Court. 38. Accepting the contention that the Court is not entitled to add or delete any condition prescribed in a tender form, the Supreme Court held in Sangeeta Singh that “the Court cannot