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TMI Blog2011 (11) TMI 145X X X X Extracts X X X X X X X X Extracts X X X X ..... he decision to prefer one offer over the other. - Writ petition is dismissed. - W.P.(C) No.7982/2011 - - - Dated:- 28-11-2011 - MR. JUSTICE PRADEEP NANDRAJOG AND MR. JUSTICE S.P. GARG JJ. Represented By: Mr. Neeraj Kishan Kaul, Sr.Advocate with Mr. Ashish Wad, Advocate For Petitioner Mr. A.S. Chandhiok, ASG with Ms.Sapna Chauhan and Mr.Gurpreet S.Parwarda, Advocates For Respondents PRADEEP NANDRAJOG, J. 1. As the rupee hits yet another low against the dollar; and trades at ₹ 53/- to $1; with the projected forecast that by the end of the current fiscal year the rupee would be trading at Rs. 55/- to $1, it is expected that every penny would be fought for. Instant writ petition tells one such story. 2. The story commenced when in March 2011 the first respondent published a notice inviting tender. Offers were invited for supply of 367.93 lakh dose of BCG vaccines. The petitioner submitted an offer quoting a price of 28.60 per dose of BCG vaccine and as per the offer clearly stated that VAT as applicable from time to time would be charged extra. The second respondent also submitted an offer quoting likewise i.e. the unit price per dose of BCG vaccine at 28 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be the beneficiary of a less gross price being paid. It paid 28.60 per dose of BCG vaccine + 4% VAT thereon and the second respondent bore the extra burden of 1% VAT. 7. On learning that VAT had been increased on BCG vaccines in the State of Tamil Nadu from 4% to 5% with effect from 11.7.2001, on 27.8.2011 the petitioner wrote a letter to the first respondent informing that in view of said fact that the price quoted by it had come at par with the price quoted by the second respondent; and thus the petitioner sought the matter to be reviewed and its offer to be accepted. Little did the petitioner realize that the second respondent was absorbing the 1% hike in the VAT chargeable. 8. On 2.9.2011 the first respondent placed the second indent upon the second respondent requiring further 138 lakh doses of BCG vaccines to be supplied. At that stage the petitioner collected extra ammunition and fired the same at the respondents. It alleged that Rule 160 of the General Financial Rules 2005 were violated by the first respondent, in that, past performance being required to be considered as per the said Rules was alleged to be ignored. The petitioner also started raising issues on the qua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applied with a rule of caution i.e. the State must have the freedom to conduct business as business needs to be conducted. 11. Article 14 of the Constitution of India guarantees protection against arbitrary State action and mandates that the State shall not deny to any person the equality before the law. In the locus classicus on the subject i.e. the decision reported as AIR 1979 SC 1628 Ramanna Dayaram Shetty Vs. IAAI the principles of reasonableness, rationality and nonarbitrariness as projected under Article 14 of the Constitution of India; being the characteristic of every State action, whether it be under the authority of law or in exercise of the executive power of the State were recognized. The public law character of actions of the State against an individual in matters pertaining to contract, on specific being a contract for tenancy, was highlighted in the decision reported as AIR 1989 SC 1642 Dwarka Dass Marfatia Sons Vs. Board of Trustees of the Port of Bombay. A post contractual dispute, as was the case in Dwarka Dass Marfatia s decision, was considered by the Supreme Court in the decision reported as AIR 1990 SC 1031 Mahavir Auto Vs. Indian Oil Corporation Ors. P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . On the issue of it being a case of a standing offer and concluded contracts coming into being at every stage when indent was placed, requiring as pleaded by the petitioner, the Government to constantly monitor the changed scenario during the period of the validity of the standing offer, the answer has to be once again in the negative. The reason is the extension of the same principle of constitutional morality i.e. fairness and non-arbitrariness in the State action. If the action of the State where a bargain is concluded, whether by way of a concluded contract or by way of a standing offer requiring contractual obligations coming into being with each indent being placed, is fair and reasonable, subsequent events which were unforeseen would not make the action unreasonable. If the argument advanced by the petitioner is accepted it would mean that pertaining to standing offers the jural relationship would be under a constant glaze of the Courts and suffice would it be to state that Courts are loath to constantly supervise an executary contract; a standing offer would be akin to an executary contract. 14. But, in the instant case, said legal position need not be even debated for t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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