- (1.) THE first petitioner, in this petition, is a company incorporated under the provisions of the companies Act, 1956, having its Registered Office at Calcutta. The second petitioner is the managing Director of the first petitioner-Company.
(2.) IN this petition, the petitioners have sought for a declaration that the resolution dated 28th of october, 1998 in Subject No. 38 (291), a copy of which has been produced as Annexure-M, passed by the first respondent-Bangalore Mahanagara Palike (hereinafter referred to as "the corporation"), wherein the first respondent had resolved to entrust the work relating to erection of two electric cremation furnaces in Bangalore City, to the 6th respondent, is illegal, unconstitutional and void; and for a direction to respondents 1 to 5 not to give effect to the said resolution; and for a further direction to the first respondent to accept the tender submitted by the first petitioner for erection of the said electric cremation furnaces.
(3.) THE facts, which are not in serious dispute and have bearing for the disposal of this petition, may be stated as hereunder: (a) The Corporation, by means of paper publication dated 22nd of November, 1996, invited applications to decide pre-qualifications from established, reputed and financially sound firms, who have experience in design, manufacture, supply and erection of equipments, such as, furnaces, transformers etc. , for the purpose of erection of two electric cremations to be located at places known as "banashankari" and "bommanahalli" in Bangalore City on turnkey basis. The estimated cost for erection of each of the electric furnaces was fixed at Rs. 90,31,000/ -. As per the notification issued, the equipments are to be erected by the successful contractor inside the buildings to be constructed by some other agency. The scope of work to be executed by the successful contractor includes design, manufacture, supply, erection, testing, commissioning of electric crematoria equipments; and the work is required to be completed in twelve months' time. The first respondent, on consideration of the applications for pre-qualification submitted by the first petitioner, the 6th respondent and others, selected the first petitioner, 6th respondent and m/s. Asea Brown Boveri (for short "m/s. ABB") as the contracting agencies who satisfy the requirements of the notification for the projects in question. Accordingly, the first petitioner and the 6th respondent submitted their tender documents along with the earnest money deposit of Rs. 1,00,000/- before 25th of May, 1997, which was the last date prescribed for submitting the tender documents. Thereafter, the tender documents were opened on 26th of May, 1997 and since M/s. ABB had not submitted its tender documents along with the Bank Draft for Rs. 1,00,000/- as required, as part of the conditions of the tender documents, the tender submitted by m/s. ABB was rejected by the Corporation at the threshold. In the tender documents submitted by the petitioners and the 6th respondent, while the petitioners had quoted the price to execute the work for each of the furnaces at 'banashankari' and 'bommanahalli' at Rs. 58,95,000/-, the 6th respondent had quoted Rs. 83,97,985/ -. The petitioners, while quoting the price as stated above, had also offered a discount of 2 per cent on the total price in respect of both the works; and 4 per cent of discount if certain additional advance payments were to be made to the first petitioner by the Corporation. (b) The material on record discloses that after consideration of the tender documents submitted by the first petitioner and the 6th respondent, the concerned Engineer has, on 9th of July, 1997 recommended to the Commissioner to accept the tender of the 6th respondent for a sum of Rs. 83,97,985/ -. The material on record also shows that the Commissioner and the Joint commissioner, by means of their order dated 23rd of July, 1997 accepted the proposal of the engineer and directed that the matter be placed before the Standing Committee. However, before the matter was placed before the Standing Committee as per the note of the commissioner and the Joint Commissioner, the papers were placed be- fore the Additional Commissioner and he, on consideration of the materials on record, by his order dated 8th of August, 1997, directed to obtain the details of pollution control equipments installed by the first petitioner and the 6th respondent, from the places where they have executed the work. It transpires that pursuant to the order made by the Additional Commissioner, the Corporation entered into correspondence with the Bombay Municipal Corporation, Rajkot Municipal Corporation and Calcutta Municipal corporation with regard to the credentials of both the first petitioner and the 6th respondent in the matter of erection and performance of electric furnaces and pollution control equipments by both the first petitioner and the 6th respondent. The Bombay Municipal Corporation sent letters dated 3rd and 20th of January, 1998 certifying the satisfactory performance of crematorium erected by the 6th respondent. The Calcutta Municipal Corporation sent letter dated 1st of january, 1998 certifying the satisfactory performance of the work executed by the first petitioner. (c) After getting the certificates from the Municipal Corporations, referred to above, the additional Commissioner directed formation of an Expert Committee. Accordingly, an Expert committee consisting of Sri M. P. Chowdaiah, former H. O. D. , Mechanical Engineering department, U. V. C. E. , and Sri N. M. Ramdas, Assistant General Manager, Mecon, was constituted. (d) Subsequently, the petitioners and the 6th respondent were called for negotiations by the superintending Engineer of the Corporation on 17th and 20th of March, 1998. During the course of the negotiation, it transpires that both of them had intimated the Superintending Engineer stating that they would confirm their rates through letters. Accordingly, on 21st of March, 1998, the 6th respondent gave its letter reducing its rate from Rs. 83,97,985/- to Rs. 60,42,000/ -. However, the petitioners, on 23rd of March, 1998 had sent their fax message confirming the rate earlier quoted by them and further stating that there is no scope to reduce the price. (e) The Expert Committee, after consideration of the tender documents submitted by the petitioner and the 6th respondent and also the prices quoted by them and all other relevant circumstances, gave their opinion. Subsequent to the receipt of the opinion given by the Expert committee, the matter was placed before the Standing Committee of the Corporation on 28th of september, 1998. The Standing Committee of the Corporation, by means of its resolution dated 28th of September, 1998, resolved to accept the tender offered by the 6th respondent for a sum of rs. 60,42,000/ -. Thereafter, the resolution of the Standing Committee was again placed before the Council of the Corporation and the Council of the Corporation, on 28th of October, 1998 unanimously resolved to approve the resolution of the Standing Committee and approved the tender of the 6th respondent. (f) In the meanwhile, the petitioners being aggrieved by the resolution of the Standing committee and also that of the Council of the Corporation, addressed a letter to the State government making out a grievance about the non-entrustment of the contract to the first petitioner and giving of the same to the 6th respondent. On 14th of December, 1998 an agreement was entered into between the Corporation and the 6th respondent setting out the terms and conditions under which the 6th respondent was entrusted with the works in question. Thereafter, on 16th of December, 1998, the Corporation issued the work order to the 6th respondent. (g) The petitioners have, on 8th of January, 1999 presented this petition before this Court. (h) It is the case of the petitioners in this petition that though the first petitioner was the lowest tenderer having submitted its tender agreeing to execute the work relating to each of the electric crematoriums in a sum of Rs. 58,95,000/- and in all, in a sum of Rs. 1,17,90,000/-as per the terms and conditions stipulated in the tender documents, respondents 1 to 4, without calling the petitioners for negotiation, clandestinely called the 6th respondent for negotiation and permitted it to reduce the tender amount initially offered at Rs. 83,97,985/- to Rs. 60,42,000/- for each of the electric crematoriums and decided to award the works in question to the 6th respondent. According to the petitioners, it was not permissible for the Corporation to negotiate only with the 6th respondent and permit it to change the price quoted by it as the same being expressly prohibited in the tender documents; and such an order is totally opposed to the principles of natural justice, fairness and would constitute an act of extreme capriciousness and favouritism in awarding the contract and conferring financial benefit upon a tenderer who was not only less qualified, but has lesser experience than the first petitioner; and such action would seriously infringe the rights guaranteed to the petitioners under Article 14 of the Constitution of India. It is also the case of the petitioners that the first petitioner has been in the field of executing the work relating to erection of electric crematorium for the last 40 years and it has already erected more than 50 electric crematoriums in various parts of the country. In other words, it is the case of the petitioners that the petitioners are more suitable, better experienced, qualified and professionally more skillful and competent to execute the works in question than the 6th respondent; and without any justification, the 6th respondent is made to show as if it has better experience than the first petitioner in erecting electric cremation furnaces, venturi scrubbers and metal chimneys, which are devices meant, to control pollution, on the sole ground that it had executed a crematorium with pollution control devices. It is their case that the Expert Committee constituted by the Corporation having recommended the case of the first petitioner, there was absolutely no justification to accept the tender offered by the 6th respondent. It is the further case of the petitioners that all the doubts and objections raised by respondents 1 to 4 with regard to the capability of the first petitioner, were satisfactorily explained to respondents 1 to 4 by the representative of the first petitioner both in the course of the discussion with the officials of the corporation and also by means of their letters, copies of which have been produced as annexures-H1 to H3, J1 to J3 and K1 to K12 series produced along with the petition. (i) However, respondents 1 to 4 and respondent 6 filed their objections and resisted the claim of the petitioners. They denied the claim of the petitioners that the first petitioner is more suitable than the 6th respondent to execute the works in question and that the first petitioner was not called for negotiation both with regard to the nature of the work to be executed by it and also with regard to the price quoted. It is their case that Sri Chowdaiah, one of the members of the expert Committee, had recommended for acceptance of the tender submitted by the 6th respondent 'in view of superiority in design, technology and operation, if the lowest quotation is not only the criteria'. It is their further case that the other member of the Committee Sri Ramdas had only stated that the offer submitted by the first petitioner is 'technically acceptable'; and therefore according to them, the assertion made by the petitioners that the Expert Committee had recommended for accepting the tender submitted by the first petitioner is not correct. It is their further case that after careful scrutiny of the tender documents submitted by the first petitioner as well as the 6th respondent and on consideration of all the materials produced by them in support of their respective claim and keeping in mind the nature of the work required to be executed by the tenderer and the interest of the Corporation and public interest, the Standing Committee as well as the Council of the Corporation, after thorough discussion in the matter, had accepted the tender submitted by the 6th respondent; and the said decision of the Standing Committee as well as the Council of the Corporation is not liable to be interfered with by this Court in exercise of its extraordinary jurisdiction under Articles 226 and 227 of the Constitution of India. They also strongly countered the allegations made by the petitioners that the 6th respondent was shown undue favour by respondents 1 to 4; and on account of extraneous reasons and irrelevant considerations, the tender submitted by the 6th respondent was accepted by the Corporation. ;