- (1.) It is the case of the writ petitioner that like previous occasions the respondent 1 Bharat Coking Coal Ltd. in or about March, 1987 issued tender notice whereby sealed tenders were invited from intending buyers for the sale and disposal of various iron and steel scrap materials from various places of Central Coal Washeries Organisations situate at Dugda, Bhojudih and Patherdih. The terms and conditions for the said tender were inter alia as follows.- (a) All items as mentioned in the Schedule of disposal would be sold on "AS IS, WHERE IS" basis. (b) The intending tenderers should quote their prices against the items in which they are interested on the body of the Schedule only. Quotations given on plain paper would not be accepted. (c) The earnest money as indicated against each item quoted must accompany the tender in full, otherwise quotation will not be considered at all. Such deposit should only be in the form of Bank Draft drawn on State Bank of India, Dhanbad in favour of "Bharat Coking Coal Ltd." A/C Central Coal Washeries Organisation Dhanbad". No cheque will be accepted towards earnest money. The tender would be rejected outright unless accompanied with the earnest money as prescribed in the tender. This earnest money would be adjusted against the security deposit to be furnished by the successful tenderer. If the tenderer fails to deposit the security money on acceptance of this rate by CCWO as required in clause 4(b) the earnest money would be forfeited. (d) The tenders shall remain open and valid for acceptance by CCWO for a period of 6 months from the date of opening of tender. On or about 6th April, 1997 the petitioner purchased one tender notice and/or conditions of sale which were sold in cyclostyled form against payment of Rs. 100/-. Such tender forms were sold at various places including Dhanbad and 6 Lyons Range, Calcutta. On or about 1oth April, 1987 petitioner 1 duly submitted tender for purchase and lifting the various scrap and rejected iron and steel materials, conveyor belt scrap lying at Dugda, Bhojudih and Patherdih coal washeries. Petitioner duly quoted rate for purchase of individual items of scrap materials and the said rates were highest rate in respect of different such items. Petitioner 1 in terms of the said tender conditions on or about 10th April, 1987 duly deposited a sum of Rs. 67, 000/- being an aggregate amount of earnest money with respondent 1 at the office of the respondent 3. On 10th April, 1987 the tender of the petitioner 1 along with other tenders submitted by other intending buyers was opened and it was found and declared that the petitioner 1 was the highest bidder/offerer in respect of several items of material lying at Dugda and Bhojudih. The particulars of the materials with prices in respect of which the petitioner I was declared highest bidder/ offerer are mentioned hereunder :-
(2.) It is the case of the petitioner that on the date of opening of the tenders the respondent 2 and/or his representatives and/or subordinates duly assured petitioners and/or their representative that the formal acceptance of the said tender in respect of the said tender will be issued in due course. In terms of the said conditions of sale the tender was to be kept open and valid for six months for acceptance by the respondents. It has been alleged that the respondent 2, did not take any step whatsoever for issue of acceptance letter until 27th October, 1987 when the respondent 3 by his letter dated October 27, 1987 addressed and received at 83, Madan Mohan Burman Street, Calcutta asked the petitioner 1 to extend the validity of the tender till 30th November, 1987 within seven days. It has been alleged that by issuing the said letter the respondents evinced an unequivocal intention to issue letter of acceptance in respect of the petitioners' highest offer though not within the originally stupulated time but within the mutually extended period. Petitioners by a letter dated 31st October, 1987 duly extended the validity of the said tender up to 31st Dec., 1987. By the said letter dated 31st October, 1987 the petitioner requested respondent 3 being an authorised person for the purpose, to issue formal letter of acceptance to the petitioner 1. It has been further alleged that upon being found and/or declared the highest bidder/offerer as aforesaid and more so, after receiving the said letter asking for extension of validity period petitioners have altered their position by arranging money for the purpose of purchase of the materials and further negotiating with various customers for resale of the same. Immediately after receipt of the said letter dated 31st October, 1987 by the respondent 3 petitioner 2 duly visited from time to time the office of the respondent 2 and/or 3 and requested for issuance of formal letter of acceptance. It has been alleged that whenever the petitioner 2 visited the office of the respondent 2 and/or 3 it was assured for and on behalf of the respondent 1 that formal letter of acceptance would be issued very soon. It has since transpired, however that the respondent did not take any effective step whatsoever for issuance of formal letter of acceptance. It is the further case of the petitioners that when the petitioners had been expecting to get formal letter of acceptance, the petitioner in or about March, 1988 received a letter dated 10/15th March, 1988 addressed for and on behalf of the respondent 2 along with a cheque for Rs. 67, 000/- whereby the earnest money of Rs. 67, 000/- was refunded. The said letter dated 10/ 15th March, 1988 was addressed to and received by the petitioner 1 at 83, Madan Mohan Burman Street, Calcutta. BHOJUDIH COAL WASHERY Particulars of items Qty Rate 1. M. S.and C. I. Scraps 541 M.T. Rs. 2, 211.00 per M.T. 2. Mixed lot of Brass/ Bronze/ Copper Scraps (Boring and Turning) 2, 927.5 Kgs Rs. 31.51 " Kg. 3. Scraps Super enamelled Copper Wire/ Binding Wire of motors. 1, 092 Kgs. Rs. 33.81" " DUGDA COAL WASHERY 1. M. S.and C. I. Scraps 841 M. T. Rs. 2, 305.00 Per M. T. 2. Conveyor belt Scraps 35" Rs. 8, 599.99 " " 3. Bearing Scraps 7" Rs.10, 111.00 " " 4. Chain links Scraps 80" Rs. 2, 411.00 " " The petitioner 1 by letter dated 13th April, 1988 protested against such illegal and unilateral action of refund of the said sum of Rs. 67, 000/- by or on behalf of the respondents. It has also asked for the reasons for refund of the earnest money. Having received reply to the said letter dated 13th April, 1988 the petitioner again demanded of the respondents and each of them to issue formal letter of acceptance. By the said letter dated 7th June, 1988 petitioner 1 extended the validity of the said tender in order to enable respondent to issue formal letter of acceptance. By the said letter the respondent 1 informed the respondent 3 that the said cheque of Rs. 67, 000/- had not been encashed. On or about 24th June, 1988, petitioner 1 received a letter dated 18th June, 1988 from the respondent 3 at 83, Madan Mohan Burman Street, Calcutta. Petitioner 1 thereby and thereunder gave no information regarding acceptance or rejection of the said tender submitted by petitioner 1. The said letter merely quoted a clause contained in the tender notice which read as follows: "The undersigned reserves the right to withdraw from sale any item advertised prior to acceptance of any tender and to accept or to reject any or all tenders or to decrease) increase the quantity as advertised without assigning any reason thereto." It has been alleged that by the said letter dated 18th June, 1988 there is no order of rejection of the said tender either by the General Manager being respondent 2 or by any other authority. It will appear from the said clause of the said tender (the validity and legality whereof is disputed) that the respondent 2 alone will exercise such right. It has been contended that nowhere from such letter it would appear that respondent 2 has exercised any such right. It has been further submitted that assuming but not admitting that such clause is valid and legal and official concerned vested with such discretion should not abuse the same which is to be exercised very sparingly and only in an extreme case. In fact the said impugned letter dated 18th June, 1988 is not an act of exercise of power under the said clause. It has further been alleged that none of the respondents had any power or authority after declaring the petitioners offer as highest to reject the tender taking advantage of the said clause. It has also been alleged that the rejection, if any, is illegal, unconstitutional, arbitrary and whimsical. It has further been alleged that the refusal to entertain the said offer/tender of the petitioner resulted in violation of the rule of natural justice by reason of the fact that no opportunity of hearing was given by the respondent to petitioner before taking such action. It has also been alleged that the respondents by asking the petitioners for extension of the validity of the tender held out a promise for issuance of letter of acceptance. Petitioners and each of them acting upon such promise bona fide altered their position by, inter alia, arranging money and further negotiating with various parties for resale of the materials. It is the contention of the petitioners that respondents and each of them are bound to issue letter of acceptance of such tender. The respondents being governmental agencies are not entitled to act in such illegal and capricious manner as they did. The petitioners have also challenged the said clause in the tender as illegal and invalid as the same militates against the principles of natural justice, sense of propriety and fair play.
(3.) Mr. P.K. Roy, learned Advocate for the petitioner submitted that such a clause in the contract is bad. He also submitted that power was specifically conferred upon the General Manager but in this case letter has been issued by Technical Manager and as such the same is not valid and binding. He has further submitted that the respondent being a government company cannot act arbitrarily and whimsically. In any event he submitted that such rejection clause on the basis of which the cheque has been refunded is not applicable in the present case. It has also been submitted that on the basis of specific assurance the validity of period of the offer has been extended by the petitioner and it is not open for the respondent thereafter to reject the offer. In support of his contentions Mr. Roy relied upon the following decisions :-- Ramanna Dayaram Shetty v. International Airport Authority reported in AIR 1979 SC 1628; M/s. Erusian Equipment and Chemicals Ltd. v. State of West Bengal and Union of India v. A.K.Mithiborwala reported in AIR 1975 SC 266; M/s. Omprakash Periwal v. Union of India reported in 1988 (1) CLJ 394.;