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2006 (10) TMI 471 - SC - Indian LawsNotice inviting tender issued by ’Maharashtra State Power General Co. Ltd.’ ('MAHAGENCO') - coal liaisoning, quality and quantity supervision for its Thermal Power Station - failed to fulfill the essential qualifications of the notice inviting tender - whether having regard to the fact that tender document issued on 03.03.2005, the requirement to engage minimum 100 persons in the previous year would mean financial year 2003-04 or 2004-05 - violation of Condition No.1.5(vii) - 'declared defaulter' - HELD THAT:- The expression ’declaration’ has a definite connotation. It is a statement of material facts. It may constitute a formal announcement or a deliberate statement. A declaration must be announced solemnly or officially. It must be made with a view ’to make known’ or ’to announce’. When a person is placed in the category of a declared defaulter, it must precede a decision. The expression ’declared’ is wider than the words ’found’ or ’made’. Declared defaulter should be an actual defaulter and not an alleged defaulter. In this case, Appellant had made a counter claim. It had raised a bona fide dispute. It may be true that when the tender document was not furnished to Appellant by the Madhya Pradesh State Electricity Board, on the premise that he is a defaulter, it filed a writ petition. A learned Single Judge of the Madhya Pradesh High Court while passing an order recorded a finding that it was a defaulter in respect of the said demand. We, however, at the cost of repetition would place on record that the other three bidders had clearly stated that they would not be able to match the rates of Appellant. It is also relevant to note here the categorical stand taken by MAHAGENCO before the High Court in its counter affidavit was that the contract had been awarded in favour of Appellant in its own interest. In regard to the order passed by the Madhya Pradesh High Court, it stuck to its stand that a clear finding was arrived at therein that the observations which were incidentally made in the judgment should not come in the way of Appellant in securing other contracts. Law operating in the field is no long res integra. The application of law, however, would depend upon the facts and circumstances of each case. It is not in dispute before us that there are only a few concerns in India who can handle such a large quantity of coal. Transportation of coal from various collieries to the thermal power stations is essential. For the said purpose, apart from transportation job, the contractor is required to see that coal of appropriate grade is supplied. Appellant herein is in business for the last 52 years. It had been taking part in contracts involving similar jobs in various parts of India. It had all along been quoting a low rate. According to it, despite the same it has been generating profits. The employer concededly is not bound to accept a bid only because it is the lowest. It must take into consideration not only the viability but also the fact that the contractor would be able discharge its contractual obligations. It must not forget the ground realities. MAHAGENCO considered all aspects of the matter while accepting Appellant’s offer. In its counter affidavit, it categorically stated that Appellant would be able to perform the contractual undertaking even at such a low rate. While saying so, however, we would like to observe that that having regard to the fact that a huge public money is involved, a public sector undertaking in view of the principles of good corporate governance may accept such tenders which is economically beneficial to it. It may be true that essential terms of the contract were required to be fulfilled. If a party failed and/or neglected to comply with the requisite conditions which were essential for consideration of its case by the employer, it cannot supply the details at a latter stage or quote a lower rate upon ascertaining the rate quoted by others. Keeping in view a particular object, if in effect and substance it is found that the offer made by one of the bidders substantially satisfies the requirements of the conditions of notice inviting tender, the employer may be said to have a general power of relaxation in that behalf. Once such a power is exercised, one of the questions which would arise for consideration by the superior courts would be as to whether exercise of such power was fair, reasonable and bona fide. If the answer thereto is not in the negative, save and except for sufficient and cogent reasons, the writ courts would be well advised to refrain themselves in exercise of their discretionary jurisdiction. What relief can be granted - The private respondents who had formed a cartel have successfully obtained the contract after the judgment of the High Court. Award of such contract although was subject to the decision of this appeal, this Court cannot ignore the fact that if Appellant is permitted to take over forthwith, supply of coal to the Thermal Power Station may be affected. We, therefore, intend to give another opportunity to MAHAGENCO. It shall consider the offer of Appellant upon consideration of the matter afresh, as to whether it even now fulfils the essential tender conditions. If it satisfies the terms of the tender conditions, the contract may be awarded in its favour for a period of one year; but such contract shall take effect after one month from the date of the said agreement so as to enable the private Respondents herein to wind up their business. This order is being passed in the interest of MAHAGENCO as also the private Respondents herein. Private Respondents, however, shall be paid their dues in terms of the offer made by them and accepted by MAHAGENCO. The appeal is allowed. All the Private Respondents shall pay and bear their cost of Appellant which is quantified at ₹ 50,000/- each.
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