BOHRA AGRIFILMS PVT LTD Vs. STATE
LAWS(J&K)-2006-10-10
HIGH COURT OF JAMMU AND KASHMIR
Decided on October 30,2006

Bohra Agrifilms Pvt Ltd Appellant
VERSUS
STATE Respondents

JUDGEMENT

- (1.) CLAIMING to be a small scale industrial unit registered with the department of Industries and Commerce of the respondent/Government and engaged in manufacturing monolayer UVS Poly films the petitioner pleads that Government have been buying such films through Horticulture/Agriculture department for the last 10/15 years, but for current year respondent No.2 while floating tenders for the same has sought supply of three layer UVS poly films, with the design of depriving petitioner, a local unit, from tendering because the petitioner manufacturers only monolayer poly films which are being supplied by them to Government departments. Pleading that being the only local industrial unit engaged in manufacture of above said films intending to tender for supply thereof the petitioner maintains that he is entitled to 15% price preference over industrial units from outside the Sate under the industrial policy of the State whereunder such preference has been made available on the landed cost of product to the local SSI Units in all government purchases which mean that if the rates quoted by local SSI Units are within 15% difference between lowest rate quoted by an outsider Unit and the one quoted by a local unit, the order shall be placed with the local unit. Alleging that the rates quoted by 3rd respondent, an outsider industrial unit, were Rs. 140.82 per Kg. as against Rs. 157/ - quoted by petitioner, with benefit of 15% price preference, the contract should be allotted to him and apprehending that the official respondents intend to allot the contract to respondent No.3 in violation of their obligation to accept petitioners tender under the aforesaid government industrial policy, the petitioner prays for appropriate relief.
(2.) IN their reply the official respondents while questioning maintainability of petition on the ground of agitating disputed questions of fact have also pleaded that while intending to invite supply of UVS poly films the department took the matter with Indian Petro Chemical Corporation Ltd: who while stating that they had stopped manufacturing the item advised the department to contact the office of National Committee on Plasticulture application in Horticulture in the Ministry of Agriculture and Cooperation, who conveyed a list of Companies in India having necessary know how and machinery to manufacture and supply UVS poly films which includes 3rd respondent while petitioner/unit did not find a mention therein. The Project Officer of the aforesaid Ministry also informed that selling price of UVS films was Rs. 135/ - per Kg: plus sales tax whereafter tenders were invited with the same specifications. Alleging that the tender documents issued to petitioner/unit were filled and submitted by M/s Bohra Agri Films Pvt. Ltd: Udaipur which not being a local unit was not entitled to price preference, however the tenders were placed before the appointed Committee who after test check of samples etc. made a report to the State Level Rate Contract finalization Committee alongwith a comparative statement of the items who found the
(3.) RD respondent entitled to allotment as having offered Rs.139.50 per Kg: with 3% discount and sales tax @ 4% against form C & D while as M/S Bohra Agri Films Pvt. Ltd Udaipur had offered the rate of Rs. 157/ - per Kg inclusive of all taxes while as tender of another contending unit namely M/s D. P. Wires, Ratlam, Madhya Pradesh was found on higher side. It has also been disclosed by official respondents that during course of deliberations a letter No. CHOL/S.O (13 -III) 7606 -09 dated: 17.11.2004 received from Chief Horticulture Officer, Leh was placed before the Committee according to which the petitioner/firm had been asked by him to supply 15.50 M.Ts of UVS films at the rate as approved by the District Purchase Committee, Leh but the Unit failed to supply material within the stipulated period despite provision of storage facility at Jammu at his asking whereupon he had recommended black listing of the firm. It is also alleged that since petitioner/company had previously also been indulging in negative tendering and cheating, it could not be considered for supply order particularly because on checking of its premises by Dy. Director, Horticulture Central and Chief Horticulture Officer, Leh on directions of Director, the officers had reported that nothing could be located in the premises which could suggest that the Unit has started production of UVS poly films. Concluding the reply the respondents have stated that in circumstances the 3rd respondents tender being lowest was accepted who had already undertaken the supplies at an enhanced rebate of 5% instead of 3% as offered by him. In its separate reply respondent No.3 has contended that on asking of the concerned Committee he has raised the percentage of discount from 3% to 5% and slashed down the rates quoted to Rs. 132.50 as against Rs. 139.59 and thus even if 15% price preference was available to petitioner the rates quoted by him would still not entitle him to allotment of the contract against them. During course of submissions the counsel appearing for respective sides have reiterated contents of their pleadings with reference to annexures on record. 3. I have heard learned counsel and considered the matter. In nutshell petitioners whole case is that being a local omit holder he was entitled to 15% price preference on the supply rates and would thus be entitled to allotment of contract as against 3rd respondent who appears to have been allotted the work and undertaken supplies. At the same time, however, respondents allege that the tender documents issued to petitioner were used by the Unit having similar caption at Udaipur which shows that petitioner/unit was not acting bonafide in the matter. In addition thereto is the fact of petitioners default in supplying the tendered material to Horticulture Officer, Leh. within stipulated period of time and said officers recommendation of black listing the petitioner/firm. These circumstances taken together with the fact that after negotiations the 3rd respondents firm has slashed down the price per Kg to Rs. 132/ -. Petitioners case appears to get significantly diluted, particularly because the petitioner/Unit has not figured amongst those recommended by the Project Officer of the concerned Ministry of the Government of India from whom the local department had sought guidance regarding the firms know -how in manufacture of supply of the required item aforesaid. Law is well settled that a tendering process by government department for supply of particular item is purely a commercial activity like that of a private party, and should ordinarily not be interfered with unless there is a element of arbitrariness, favoritism or mala fides. Here it would be proper to quote from the Supreme Court judgment in "Cochin International Airport Ltd. v. Cambatta Aviation Ltd and Others" reported as 2000 (2) SCC 67 7. while adverting to the subject the court was pleased to observe: "The award of contract, whether it is by a private party or by as public body or the State, is essentially a commercial transaction. In arriving at a commercial decision considerations which are paramount are commercial considerations. The State can choose its own method to arrive at a decision. It can fix its own terms of invitation to tender and that is not open to judicial scrutiny. It can enter into negotiation before finally deciding to accept one of the offers made to it. Price need not always be the sole criterion for awarding a contract. It is free to grant any relaxation, for bona fide reasons, if the tender conditions permit such a relaxation. It may not accept the offer even though it happens to be highest or the lowest. But the State, its corporations, instrumentalities and agencies are bound to adhere to the norms, standards and procedures laid down by them and cannot depart from them arbitrarily. Though that decision is not amenable to judicial review, the Court can examine the decision -making process and interfere it is found vitiated by mala fides, unreasonableness and arbitrariness." As is evident, the petitioner maintains that he apprehends allotment of contract to 3rd respondent which in other words implies that according to him the scrutiny of tenderers and allotment 23 as yet to be done. So there could be no question of any irregularity or arbitrariness in the process of decision making, which excludes any possibility of a judicial review.;


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