WA 119/2011 BEFORE HON’BLE THE CHIEF JUSTICE MR MADAN B. LOKUR HON’BLR MR JUSTICE A.K.GOSWAMI JUDGMENT & ORDER (CAV) Goswami,J. This appeal is directed against the judgment and order dated 7.4.2011 pa ssed by the learned Single Judge in WP(C) No.25/2011, dismissing the writ petiti on. 2) We have heard Mr GN Sahewalla, learned senior counsel for the appellant as well as Mr AK Sarma, learned state counsel appearing for the respondent nos.1 to 3. Despite notice, none appears for the respondent no.4. 3) The writ petitioner, in the writ petition, had challenged the order date d 17.3.2011, whereby the respondent no.4 was issued with the supply order for su pply of edible oil(vegetable) and had also prayed for a direction to the respond ent no.3 to issue supply order in respect of the item of supply, namely, edible oil(vegetable) in her favour. 4) In response to a tender notice dated 12.7.2010 issued by the respondent no.2, the Secretary to the Government of Mizoram, Social Welfare Department, inv iting sealed tenders from bona fide manufacturers or their authorised agents/dea lers for supply of, among others, edible oil(vegetable), the writ petitioner had submitted her tender to effect supply in Aizawl town as well as in Lunglei. The rates were to be quoted F.O.R. Aizawl as well as F.O.R. Lunglei, inclusive of a ll taxes and transportation cost. 5) On opening of tenders, it transpired that the rates offered by the writ petitioner at Rs.57.85 per litre for Aizawl and at Rs.58.95 for Lunglei emerged as lowest, and all the terms and conditions of the tender having been fulfilled, she was expecting that the supply order would be issued in her favour. However, according to the petitioner, most illegally and arbitrarily, the supply order h ad been issued to the respondent no.4. 6) The respondent nos.1,2 and 3 had filed an affidavit stating that, accord ing to the State Purchase Advisory Board(for short, the Board), the brand offere d by the petitioner firm, namely, KIRAN did not appear to be of a reputed bran d. The Board had felt that inferior quality of oil could adversely affect the he alth of the Supplementary Nutritional Programme beneficiaries(for short, SNP ben eficiaries) by causing harm to the eyes, heart, liver, etc and, accordingly, opi ned that it was advisable to procure good quality and branded edible oil, such a s, DHARA. It is on this basis that in a meeting dated 9.12.2010, the Board had r ecommended procurement of good quality and branded vegetable oil, such as, DHARA . It was also pointed out that the writ petitioner, by a letter dated 14.12.2010 , was given the opportunity, being the lowest tenderer, in terms of clause 11.0 of the guidelines of the Central Vigilance Commission, to submit her rates at wh ich she would be able to supply edible oil, such as, DHARA, FORTUNE or MAHAKOSH for Aizawl and Lunglei. Pursuant thereto, the writ petitioner had submitted her rates for DHARA and FORTUNE by her offer dated 14.12.2010. For DHARA, the writ p etitioner had quoted Rs.83.50 per litre for Aizawl and Rs.86.50 per litre for Lu nglei. For the FORTUNE brand, she had quoted Rs.82.50 for Aizawl and Rs.84.00 fo r Lunglei. It was further stated that the respondent no.4 had submitted a repres entation stating that it being the only tenderer who had offered DHARA, it shoul d be selected. The respondent No.4 expressed its willingness to supply the DHARA brand oil at Rs.82.00 per litre for Aizawl and at Rs.84.00 per litre for Lungle i, bringing down the rates from its original rate of Rs.84.00 per litre and Rs.8 7.00 per litre for Aizawl and Lunglei, respectively. While stating that the depa rtment is not bound to accept the lowest rate as per the terms and conditions ap pearing at clause 13 of the Tender Notice, the authority, in terms of the recomm endation of the Board dated 7.3.2011, had issued the order dated 17.3.2011 award ing the supply order in favour of the respondent no.4. 7) Mr GN Sahewalla, learned senior counsel appearing for the appellant subm itted that the appellant being the lowest valid tenderer, the respondent authori ty acted illegally in issuing the supply order in favour of the respondent no.4. According to him, the observation of the Board, as is reflected in the affidavi t-in-opposition filed by the respondent nos.1, 2 & 3 that KIRAN brand is not a reputed brand and that it being of inferior quality, could adversely affect the health of the SNP beneficiaries, is perverse and wholly not tenable in law. Lea rned senior counsel submits that entire decision-making process is vitiated in v iew of the fact that while there was no stipulation in the Tender Notice that th e choice would be restricted only to the three particular brands, it is apparent that the respondent authorities had given a go-bye to the conditions of the ten der in restricting their evaluation of tenders only to DHARA, FORTUNE and MAHAKO SH brands. He further submits that the appellant revised her offer on 14.12.2010 , pursuant to the letter dated 14.12.2010 issued by the authority asking her to submit the rates at which she would be able to supply DHARA, FORTUNE and MAHAKOS H brand edible oil for Aizawl and Lunglei. On such revised offer being made by h er, it is, ex facie evident that the rates quoted by her were lower than that of respondent no.4 in respect of DHARA, for Aizawl and Lunglei. That being the pos ition, the respondent authorities had acted illegally in accepting the lower rat es submitted by the respondent no.4, subsequent to the submission of the revised rate by the appellant. No opportunity was granted to the appellant to match the rates subsequently offered by the respondent no.4. According to him, there was total lack of transparency and fair dealing in the instant case, requiring inter ference in the decision-making process culminating in issuance of the supply ord er dated 17.3.2011. Learned senior counsel has placed reliance in the case of Du tta Associates Pvt Ltd vs. Indu Merchantile Pvt Ltd and ors, reported in (1997) 1 SCC 53, to drive home the point that every notice inviting tender must disclos e the procedure which would be followed in the matter of acceptance or rejection of tender. 8) Learned state counsel, appearing for the respondent nos.1, 2 and 3, has tried to sustain the order of the learned Single Judge as well as the decision-m aking process by submitting that merely because writ petitioner had quoted a low er rate, it would not give her an indefeasible right to be awarded the contract, more so, when clause 13 of Tender Notice made it explicitly clear that the depa rtment was not obliged to accept the lowest rate. He also canvassed the argument that in absence of any allegation of mala fide, there is nothing wrong in tryin g to procure better quality brand like DHARA, for the purpose of supply to SNP b eneficiaries. According to him, the instrumentalities of the state are to take i nto consideration a host of relevant considerations before deciding to take a pa rticular course of action, and in the instant case, the department had acted on the recommendation of the Board, which opined that good vegetable brand like DHA RA should be procured. 9) We have considered the rival submissions made by learned counsel for the parties and also considered the materials on record. 10) It would appear from the Tender Notice that sealed tenders were invited from bona fide manufactures or authorised dealers/agents. In case of manufacture rs, there was a requirement of attaching the authenticated photostat copy of the manufacturing licence; while in case of dealers/agents submitting tenders, they were to attach authenticated photostat copy of the dealership/agency certificat e from the concerned manufacturer/firm along with the manufacturing licence. It was also stipulated in the Tender Notice that certificates, which are not valid for the current year, would be rejected. Preference was to be given if the manuf acturer was having valid licence under Prevention of Food Adulteration Act, 1953 . Clause 9 of the Tender Notice required sample of the item to be submitted and if it did not conform to the prescribed standard, the same would be rejected. Th e tenderers were also required to submit, in terms of clause 10 of the Tender No tice, the current year’s Certificate of Analysis of food from government or gove rnment- approved or accredited laboratories clearly indicating the protein, calo rific and micronutrients contents and the characteristic/composition as prescrib ed by the BSI. It is not the case of the respondents that the writ petitioner/ap pellant had not fulfilled the terms and conditions of the tender, or that the te nder of the writ petitioner had been rejected. The ground taken for not consider ing favourably the case of the appellant was that the brand KIRAN , which was t o be supplied by the writ petitioner/appellant, was considered to be of inferior quality and detrimental to the health of the SNP beneficiaries. It is not known as to on what basis the said conclusion was arrived at by the Board. In absence of any materials provided by the state respondents to justify such a conclusion , we are of the opinion that such a conclusion is not sustainable in law. 11) If the respondent authorities had wanted the tenderers to submit their t enders in respect of any particular brands, then, it was incumbent on their part to have notified the same in the Tender Notice. In Dutta Associates PVt Ltd(sup ra), out of 17 tenders received, the tender placed at Sl Nos 1 and 2 were found ineligible and, therefore, they were excluded from consideration. The offer of t he tenderer placed at Sl No 3, namely, Dutta Associates Pvt Ltd, which was lowes t tenderer amongst the eligible was not accepted. The officials worked out what they called ’viability range keeping in view the prevalent prices of rectified spirit outside the State as most of the rectified spirit to be supplied under th e contract had to be procured from outside the State. The tenderer at Sl No 11 w as the lowest within the said viability range . The State respondents did not a llot the work to the tenderer at Sl 11 either and instead, they called Dutta As sociates Pvt Ltd to revise its offer, which it did and its revised bid was, ther eafter, accepted. This was challenged before this Court and ultimately against t he decision of the Division Bench, the matter was carried to the Apex Court. The Apex Court laid down as follows: 7 & & & &We reiterate that whatever procedure the government proposes to llow in accepting the tender must be clearly stated in the tender notice. The co nsideration of the tenders received and the procedure to be followed in the matt er of acceptance of a tender should be transparent, fair and open. While a bona fide error or error of judgment would not certainly matter, any abuse of power f or extraneous reasons, it is obvious, would expose the authorities concerned, wh ether it is the Minister for Excise or the Commissioner of Excise, to appropriat e penalties at the hands of the Courts, following the law laid down by this Cour t in Shiv Sagar Tiwari -Vs- Union of India, (1996) 6 SCC 558 (In Re, Capt. Satis h Sharma and Sheila Kaul). 12) A reading of the aforesaid observation of the Apex Court makes it clear that the authority should notify in the tender notice itself the procedure which they proposed to adopt while accepting the tender. In the instant case, there i s no dispute that in the Tender Notice it was not mentioned that the respondent would restrict their choices to a few brands of edible oil, and, more particular ly, DHARA brand. Further, it would appear that after the tenders were opened, the Board opined that KIRAN brand is apparently not a very reputed brand. It w ould be impermissible to allow the authorities to adopt a hidden criterion in th e matter of settlement of contract, as the same is an anathema to transparency, fairness and openness, which have to be scrupulously observed by the State when it chooses to distribute its largesse. Additionally, permitting the same would b e fraught with grave danger, as it may allow authorities to change the rules of the game for irrelevant and extraneous considerations. 13) It is also on record that after the writ petitioner was allowed to revis e her offer, the rate quoted by her for ’DHARA’ vegetable oil was lower than tha t of the respondent no.4. The order dated 17.3.2011 would go to show that respon dent no.4 was allowed to supply DHARA vegetable oil at Rs.82.00 per litre for Ai zawl and at Rs.84.00 per litre for Lunglei. The affidavit of the respondent nos. 1, 2 and 3 leaves no manner of doubt that these are the rates quoted by responde nt no.4 subsequently, their original rates in the tender being Rs.84.00 and Rs.8 7.00 F.O.R. Aizawl and F.O.R. Lunglei, respectively. The rate offered by the res pondent no.4, subsequently, according to us, could not have been considered by t he respondent authorities, as such a procedure, if at all permissible, was not s pelt out in the Tender Notice.. 14) In view of the aforesaid discussions, we have no hesitation to hold that the order dated 17.3.2011 issued in favour of the respondent no.4 is not sustai nable in law. Accordingly, the order of the learned Single Judge and the order d ated 17.3.2011 are set aside and quashed. 15) In the peculiar facts and circumstances of the case, we are of the opini on that ends of justice would be served if we direct the respondent authorities to issue a fresh notice inviting tender within a period of 10(ten) days from tod ay by giving wide publicity and to complete the process of issuing supply orders in respect of edible oil(vegetable) within a period of 6(six) weeks from today. Ordered accordingly. For this period of six weeks, the respondent no.4 may be a llowed to continue with the supply. However, respondent no.4 shall not be allowe d to execute any supply beyond the period of six weeks from today. 16) This writ appeal is allowed to the extent indicated above.