State Of Assam & Anr vs M/S. Abhinandan Trading (P) Ltd. & Anr

J U D G M E N T (Arising out of SLP ) No.23889/2005) WITH CIVIL APPEAL NO. 4731/2006 (Arising out of SLP ) No.24565-24566/2005) M/s. Rangpur Trading Co. (P) Ltd. ..Appellant Versus M/s. Abhinandan Trading (P) Ltd. & Ors. ..Respondents ALTAMAS KABIR, J.

After processing the same, the Commissioner of Excise submitted his report to the State Government on 10th May, 2005 in which he found three of the said tenders to be defective. The remaining five tenders were forwarded to the State Government for consideration. In the said report submitted to the State Government, the Commissioner of Excise worked out the viable/reasonable rate for supply of potable alcohol/rectified spirit to the excise warehouse at Tinsukia at Rs.18.23 per LPL. The stand of the State Government is that the said viable/reasonable rate was worked out by the Commissioner of Excise after taking into consideration the various factors referred to in Clause 28 of the NIT. Pursuant to the said NIT, one M/s. Satya Capital Services (P) Ltd. submitted its tender quoting an amount of Rs.15.10 per LPL for award of the contract. One M/s. Abhinandan Trading (P) Ltd. quoted a rate of Rs.18.95 per LPL for award of the contract and M/s. Rangpur Trading Company (P) Ltd. quoted a rate of Rs.17.11 per LPL. Ultimately, the contract was awarded to M/s. Rangpur Trading Company (P) Ltd. Such grant of contract to M/s. Rangpur Trading Company (P) Ltd. was challenged by M/s. Satya Capital Services (P) Ltd. by way of Writ Petition, being No.5305/2005, and also by M/s. Abhinandan Trading (P) Ltd. by way of Writ Petition, being No.5132/2005. The learned Single Judge allowed the said writ petitions and set aside the grant of contract in favour of M/s. Rangpur Trading Company (P) Ltd. upon holding that such grant did not disclose any logical, acceptable and/or reasonable basis. The State Government was directed to take a fresh decision in accordance with law and without any further delay.

The aforesaid judgment of the learned Single Judge dated 27th September, 2005, was challenged by way of three separate appeals - one by the State of Assam, being Writ Appeal No.585/2005, and the other two by the successful tenderer, M/s. Rangpur Trading Company (P) Ltd., being Writ Appeal Nos. 581 and 582 of 2005. The three Writ Appeals having been filed against the common judgment and order passed by the learned Single Judge dated 27th September, 2005 in W.P.) No.5132/05 and 5305/05, they were taken up for hearing and disposal together and were disposed of by the Division Bench by a common judgment and order dated 6th October, 2005. Agreeing with the findings of the learned Single Judge holding that the Commissioner of Excise had failed to comply with the stipulation contained in Clause 28 of the NIT and had fixed a viable rate at Rs.18.23 per LPL instead of determining the viable price range, the Division Bench held that the entire process of granting the contract had been vitiated resulting in an arbitrary decision. The Division Bench took note of the fact that the Commissioner and Secretary to the Government of Assam, Excise Department, had been of the view that the viable rate should be Rs. 24/- per LPL, but the same had not been accepted and the contract had been awarded to M/s. Rangpur Trading Company (P) Ltd. at the rate of Rs.17.11 per LPL.

The State of Assam has filed SLP ) No.23889/2005 against the judgment of the Division Bench of the Gauhati High Court affirming the judgment of the learned Single Judge allowing the Writ Petitions filed by M/s. Satya Capital Services (P) Ltd. and M/s. Abhinandan Trading Company (P) Ltd. M/s. Rangpur Trading Company (P) Ltd., whose contract had been quashed by the learned Single Judge, has filed two Special Leave Petitions, namely, SLP ) Nos.24565 and 24566/2005. Since all the three Special Leave Petitions arise out of the common judgment of the Division Bench of the Gauhati High Court, in the three Writ Appeals referred to hereinbefore, they have been taken up for hearing and disposal together and special leave has been granted in all the three matters. Appearing for the State of Assam, Dr. A.M. Singhvi, learned senior advocate, explained that in order to eliminate speculative bidders and to ensure uninterrupted supply of potable alcohol to the excise warehouse at Tinsukia, the State of Assam had included Clause 28 in the NIT which specified the criteria on the basis whereof the price range was to be computed.

As indicated hereinbefore, a viable/reasonable rate had been worked out by the Commissioner of Excise at Rs.18.23 per LPL. On the other hand, the Commissioner and Secretary to the Government of Assam, Excise Department, was of the view that the viable rate should be Rs.24/- per LPL. Ultimately, however, as it was felt that the said rate of Rs.24/- per LPL would cause the prices to go up and cause hardship to the consumer, the said Commissioner and Secretary, Excise Department, Government of Assam, recommended that the lower rate from amongst the rate offered by recommended firms within the viability range of Rs.17.11 to Rs.18.95 per LPL be considered. Such recommendation resulted in the awarding of the contract in favour of M/s. Rangpur Trading Company (P) Ltd. at the offered rate of Rs.17.11 per LPL.

Dr.Singhvi submitted that since three different rates had been quoted and the accepted rate was Rs.18.23 per LPL, the said three prices quoted were taken to be the viability range and the tenderer whose rate was found to be the lowest in relation to the viable range was given the contract. Special emphasis was laid on Clause 28 of the Notice Inviting Tender which has been extracted hereinbefore.

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 Judge's order is capable of being disputed. The Division Bench merely gave a stamp of approval to the learned Single Judge's judgment without examining the legal proposition involved. For the reasons aforesaid, we are of the view that all the three appeals should be allowed and they are allowed accordingly. The common judgment and order dated 27th September, 2005 passed by the learned Single Judge in W.P. ) No.5132/2005 and W.P. ) No.5305/2005 as also that of the Division Bench dated 6th October, 2005, passed in Writ Appeal No.585/2005 filed by the State of Assam and Writ Appeal Nos.581 and 582/2005 filed by M/s. Rangpur Trading Company (P) Ltd., are hereby set aside.

Before we part with this matter, having particular regard to the doubts expressed by this Court in Dutta Associates (supra), we merely express the view that in order to avoid future controversy, the Government of Assam may adopt some other procedure for granting similar contracts in future which is open and transparent and will not give rise to controversies of the instant nature in future. There will be no order as to costs.