2011 (2) TMI 1530 - HC - Indian Laws

Summary

Issues Involved:
1. Whether the tendering authority can discharge the tender after exposition of the bid without assigning any reason.
2. Whether the railway respondents acted arbitrarily in discharging the tender without assigning any reason.

Summary:

Issue 1: Discharge of Tender Without Assigning Reason
The common question of law in both writ petitions is whether the tendering authority can discharge the tender after exposition of the bid without assigning any reason in the communication. The court observed that the railway respondents did not provide reasons for discharging the tender in the impugned communications, although reasons were available in the relevant files and disclosed in the affidavit-in-opposition. The court emphasized that public orders made by public authorities must be construed objectively with reference to the language used in the order itself, as established in Commissioner of Police, Bombay Vs. Gordhandas Bhanji (AIR 1952 SC 16) and other precedents.

Issue 2: Arbitrary Action by Railway Respondents
The petitioners contended that the railway respondents acted arbitrarily by discharging the tender without assigning any reason, which is against the principles of fairness and transparency. The court referred to several Supreme Court decisions, including Union of India Vs. M.L. Capoor (AIR 1974 SC 87) and Mohinder Singh Gill Vs. The Chief Election Commissioner (AIR 1978 SC 851), which mandate that reasons must be provided for administrative actions to ensure they are not arbitrary. The court found that the railway respondents' failure to incorporate a modified clause in the tender conditions, which was necessary for public interest, led to the discharge of the tender. However, this omission should not prejudice the petitioners who had already exposed their bids.

Conclusion:
The court set aside the decisions contained in the communications dated 04.07.2011 and 29.08.2011, discharging the tenders. It directed that if the petitioners undertake to accept the non-incorporated clause, the railway respondents should consider their highest bids for acceptance. The petitioners were given seven days to furnish an undertaking, and the railway respondents were directed to determine the tender within fifteen days from receipt of the undertaking. The writ petitions were allowed with no order as to cost.