Case: State Of Assam  Vs. M/S. Abhinandan Trading (P) Ltd.

to his client. On the other hand, the refusal to grant the contract to his client was sought to be justified by the authorities by taking resort to the theory of viable price range, although the lower extreme of the purported price range was arbitrarily fixed at Rs.17.11 per LPL which was the price quoted by M/s. Rangpur Trading Co. (P) Ltd. Mr. Rao submitted that this very same question had been considered by this Court in the case of Dutta Associates (supra) and it had been observed that all those making offers were hard-headed businessmen who were quite alive to the economic viability of the offers made by them. Mr. Rao submitted that if his client was ready and willing to supply potable spirit at the rate of Rs.15.10 per LPL, which was lower than the rate offered by M/s.Rangpur Trading Company (P) Ltd., there could be no proper or logical explanation on the part of the Government of Assam to refuse to award the contract to his client.15. All the learned counsel appearing in this matter had occasion to refer to and rely upon the decision of this Court in Dutta Associates (supra). In the said case, the tender notice did not specify the "viability range" nor did it indicate that only the tenders coming within the viability range" would be considered. Such omission led this Court to observe that fairness demanded that the authority should have notified in the tender notice itself the procedure which they proposed to adopt while accepting the tender.16. The doubts expressed by this Court in the aforesaid decision were taken note of by the Government of Assam and it led to the inclusion of Clause 28 in the Notice Inviting Tender where the aforesaid omission was sought to be remedied. Clause 28 of the NIT which has been extracted hereinbefore, specifies that the contract would be given to the tenderer found suitable from the "viable range" which was to be determined on the basis of analysis of the cost price, export duty, transport cost etc. by the Commissioner of Excise, Assam. What had been left unspecified in the Notice Inviting Tender was, therefore, introduced subsequent to the decision in the case of Dutta Associates and the applicants for grant of the contract can have no further grievance on such score.17. However, apart from expressing doubts over the decision of the Government of Assam of taking recourse to the concept of "viability range", the discussion thereupon was not taken any further and the decision was rendered on a different set of facts, namely, that for granting the contract negotiations were entered into with one of the applicants only.18. It is no doubt true that there is scope of the concept of "viability range" being misused to favour a particular applicant, but there is no such allegation in the instant case, nor has any mala fides been attributed to the action taken by the authorities in awarding the contract to M/s. Rangpur Trading Company (P) Ltd. whose offer was much lower than the fixed rate. One of the arguments advanced was that the offer made by M/s. Abhinandan Trading (P) Ltd. was, in fact, closer to the fixed rate than that of M/s. Rangpur Trading Company (P) Ltd.19. Considering the submissions made and the ground realities regarding supply of potable spirit to Assam, we are inclined to accept Dr. Singhvis submission and to reject those made by Mr. Altaf Ahmed and Mr. M.N. Rao. Although, doubts were expressed by this Court in Dutta Associates (supra) regarding the concept of "viability range", its necessity or its real purpose, the decision of the Government of Assam to resort to such a procedure has to be left to the Government of Assam itself. Unless, it can be shown that the said procedure had been misused to favour any particular individual, which is not so in the instant case, it would not be proper for us to express any opinion as to the procedure the government should adopt except to say that whatever procedure is adopted should be open, fair and transparent.20. In the instant case, the methodology adopted for fixing the viable price range, as explained by Dr. Singhvi, indicates that even if the said method may not be the ideal method for granting of contracts, an average of different rates quoted against different heads by all the applicants are taken together and the ratio thereof is arrived at for fixing the viable range. It may be more prudent for the Government of Assam to adopt a different procedure in future, but as far as the present case is concerned, although the Commissioner of Excise had fixed the "viable rate" at Rs.18.23 per LPL, a "viable range" was computed between Rs. 17.11 per LPL and Rs. 18.95 per LPL. Considering the fact that the offer made by M/s. Abhinandan Trading (P) Ltd. (Rs.18.95 per LPL) was higher than the rate fixed by the Excise Commissioner, the Government in its wisdom thought it best to award the contract to M/s. Rangpur Trading Company (P) Ltd. whose offer of Rs.17.11 per LPL was lower than the fixed price.21. More than one and a half years have elapsed in respect of the period for which the contract had been awarded in favour of M/s. Rangpur Trading Company (P) Ltd. and as we have been informed, despite the orders passed by the learned single Judge and the Division Bench of the Gauhati High Court, they have still been supplying potable spirit to the Government of Assam on the basis of such agreement. In our view, it will not be in the interest either of the Government of Assam or the people of Assam to prevent M/s. Rangpur Trading Company (P) Ltd. from continuing such supply, especially when the correctness of the learned Single Judges order is capable of being disputed. The Division Bench merely gave a stamp of approval to the learned Single Judges judgment without examining the legal proposition involved.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]15. All the learned counsel appearing in this matter had occasion to refer to and rely upon the decision of this Court in Dutta Associates (supra). In the said case, the tender notice did not specify the "viability range" nor did it indicate that only the tenders coming within the viability range" would be considered. Such omission led this Court to observe that fairness demanded that the authority should have notified in the tender notice itself the procedure which they proposed to adopt while accepting the tender.16. The doubts expressed by this Court in the aforesaid decision were taken note of by the Government of Assam and it led to the inclusion of Clause 28 in the Notice Inviting Tender where the aforesaid omission was sought to be remedied. Clause 28 of the NIT which has been extracted hereinbefore, specifies that the contract would be given to the tenderer found suitable from the "viable range" which was to be determined on the basis of analysis of the cost price, export duty, transport cost etc. by the Commissioner of Excise, Assam. What had been left unspecified in the Notice Inviting Tender was, therefore, introduced subsequent to the decision in the case of Dutta Associates and the applicants for grant of the contract can have no further grievance on such score.17. However, apart from expressing doubts over the decision of the Government of Assam of taking recourse to the concept of "viability range", the discussion thereupon was not taken any further and the decision was rendered on a different set of facts, namely, that for granting the contract negotiations were entered into with one of the applicants only.18. It is no doubt true that there is scope of the concept of "viability range" being misused to favour a particular applicant, but there is no such allegation in the instant case, nor has any mala fides been attributed to the action taken by the authorities in awarding the contract to M/s. Rangpur Trading Company (P) Ltd. whose offer was much lower than the fixed rate. One of the arguments advanced was that the offer made by M/s. Abhinandan Trading (P) Ltd. was, in fact, closer to the fixed rate than that of M/s. Rangpur Trading Company (P) Ltd.19. Considering the submissions made and the ground realities regarding supply of potable spirit to Assam, we are inclined to accept Dr. Singhvis submission and to reject those made by Mr. Altaf Ahmed and Mr. M.N. Rao. Although, doubts were expressed by this Court in Dutta Associates (supra) regarding the concept of "viability range", its necessity or its real purpose, the decision of the Government of Assam to resort to such a procedure has to be left to the Government of Assam itself. Unless, it can be shown that the said procedure had been misused to favour any particular individual, which is not so in the instant case, it would not be proper for us to express any opinion as to the procedure the government should adopt except to say that whatever procedure is adopted should be open, fair and transparent.20. In the instant case, the methodology adopted for fixing the viable price range, as explained by Dr. Singhvi, indicates that even if the said method may not be the ideal method for granting of contracts, an average of different rates quoted against different heads by all the applicants are taken together and the ratio thereof is arrived at for fixing the viable range. It may be more prudent for the Government of Assam to adopt a different procedure in future, but as far as the present case is concerned, although the Commissioner of Excise had fixed the "viable rate" at Rs.18.23 per LPL, a "viable range" was computed between Rs. 17.11 per LPL and Rs. 18.95 per LPL. Considering the fact that the offer made by M/s. Abhinandan Trading (P) Ltd. (Rs.18.95 per LPL) was higher than the rate fixed by the Excise Commissioner, the Government in its wisdom thought it best to award the contract to M/s. Rangpur Trading Company (P) Ltd. whose offer of Rs.17.11 per LPL was lower than the fixed price.21. More than one and a half years have elapsed in respect of the period for which the contract had been awarded in favour of M/s. Rangpur Trading Company (P) Ltd. and as we have been informed, despite the orders passed by the learned single Judge and the Division Bench of the Gauhati High Court, they have still been supplying potable spirit to the Government of Assam on the basis of such agreement. In our view, it will not be in the interest either of the Government of Assam or the people of Assam to prevent M/s. Rangpur Trading Company (P) Ltd. from continuing such supply, especially when the correctness of the learned Single Judges order is capable of being disputed. The Division Bench merely gave a stamp of approval to the learned Single Judges judgment without examining the legal proposition involved.