JUDGMENT
Kurian Joseph, J.
1. Appellant is the petitioner in the Original Petition. Being unsuccessful in getting the contract work of “Tourism Department Construction of new block to the Guest House, Ernakulam”, the Writ Petition was filed. According to the petitioner, the lowest tender was one quoted by it. However, without considering that, the work was awarded to the 4th respondent.
2. After elaborately dealing with the factual as well as the legal position, the learned Swingle Judge found that eh technical offer in the second cover submitted by the petitioner contained a stipulation that the lump sum quoted for the work was subject to the terms and conditions stipulated by the petitioner. One such condition reads as follows:-
“Our rate is inclusive of test loading of one working pile of 1 mtr. dia only for a load of 1 1/2 times the design as specified in the tender. in case any initial test is to be done (testing to destruction) we have to be paid extra rate of Rs. 7 lakhs for one number of one metre dia pile”.
The learned Single Judge further found that with regard to the rates quoted by the petitioner also there was a condition that in case of any increase in tax or duty imposed by the Central or State Government, the same should be reimbursed. There was also a further condition demanding monthly payment for all the works executed on pro rate basis. Thus it has found that the financial offer contained in the third cover was subject to conditions, some of which are mentioned above, as contained in the second cover. True, the petitioner’s was the lowest financial offer. However, since the same was a conditional offer, the Department was fully justified, according to the learned Single Judge, in rejecting the offer. There was another contention raised by the petitioner that since the Department decided to open their cover, ie., the cover containing the financial offer, it should be taken that the Department was satisfied with the offer made in the second cover. It was also submitted that having given an undertaking, if at all there was any defect or shortcoming in the offer made by the petitioner, it should be treated to have been cured. However, the learned Single Judge was not prepared to accept any of the contentions of the petitioner and was clearly of the view that the undertaking obtained from the tenderers was only regarding formal defects/shortcomings etc. as far as the design is concerned and not with reference to the conditions. The offer of the petitioner in the second cover remained subject to the conditions stated therein. For the only reason that the financial offer made by the petitioner happened to be the lowest, it cannot be said that the work should have been awarded to the petitioner. Apparently, the said lowest offer was subject to condition and ultimately after the execution of the work the picture would be different. Naturally the Department was not inclined to accept the said conditional offers reserving a right for future litigations.
3. We are in full agreement with the view taken by the learned Single Judge. The Apex Court has time and again reinforced the law that merely because an offer is the lowest, it is not invariably necessary to accept the same. it is profitable to refer to a few decisions of the Apex Court in this regard.
4. In Tata Cellular v. Union of India (1994) 6 SCC 651 the Supreme Court held as follows:-
“The principles of judicial review would apply to the exercise of contractual powers by Government bodies in order to prevent arbitrariness or favouritism. However, there are inherent limitations in exercise of that power of judicial review. The Government is the guardian of the finance of the State. It is expected to protect the financial interest of the State. The right to refuse the lowest or any other lender is always available to the Government. But the principles laid down in Art. 14 of the Constitution have to be kept in view while accepting or refusing a tender. There can be no question of infringement of Art. 14 if the Government tries to get the best person or the best quotation. The right to choose cannot be considered to be an arbitrary power.
5. In Air India Ltd. v. Cochin International Airport Ltd. (2000) 2 SCC 617), the Apex Court observed as follows:
The award of a contract, whether it is by a private party or by a 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 negotiations 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 relation, for bona fide reasons, if the tender condition permit such a relation. It may not accept the offer even though it happens to be the 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 the decision is not amendable to judicial review, the court can examine the decision-making process and interfere if it is found vitiated by malafide, unreasonableness and arbitrariness. The State, its corporations, instrumentalities and agencies have the public duty to be fair to all concerned. Even when some defect is found in the decision-making process the court must exercise its discretionary power under Art. 226 with great caution and should exercise it only in furtherance of public interest and no merely on the making out of a legal point. The court should always keep the larger public interest in mind in order to decide whether its intervention is called for or not. Only when it comes to a conclusion that overwhelming public interest requires interference, the court should intervene.”
6. In the recent decision in W.B. State Electricity Board v. Patel Engineering Co. (2001) 2 SCC 451, while dealing with the tender conditions, the Supreme Court at para 24 of the judgment observed as follows:
“The very purpose of issuing rules/instructions is to ensure their enforcement lest the rule of law should be a causality. Relaxation or waiver of a rule or condition, unless so provided under the ITB, by the State or its agencies (the appellant) in favour of one bidder would create justifiable doubts in the minds of other bidders, would impair the rule of transparency and fairness and provide room for manipulation to suit the whims of the State agencies in picking and choosing a bidder for awarding contracts as the case of bidder for awarding contracts as in the case of distributing bounty or charity. In our view such approach should always be avoided. Where power to relax or waive a rule or a condition exists under the rules, it has to be done strictly in compliance with the rules.”
Regarding strict adherence to the condition attached to the tender, again at paragraph 31 it was observed as follows:-
“Tenders are invited on the basis of competitive bidding for execution of the work of the project as it serves dual purposes. On the one hand it offers a fair opportunity to all those who are interested in competing for the contract relating to execution of the work and, on the other hand, it affords the appellant a choice to select the best of the competitors on the competitive price without prejudice to the quality of the work. Above all, it eliminates favouritism and discrimination in awarding public works to contractors. The contract is, therefore, awarded normally to the lowest tenderer which is in public interest. The principle of awarding contract to the lowest tenderer applies when all things are equal. It is equally in public interest to adhere to the rules and conditions subject to which bids are invited. Merely because a bid is the lowest the requirements of compliance with the rules and conditions cannot be ignored.”
7. The instant case, it amy be seen that in the notice inviting tenders, condition No.s 1.17 and 1.26 read as follows:
“1.17. All tenderers are hereby cautioned that conditional offers or deviation from the condition of contract or other requirements stipulated in the tender document shall be summarily rejected as non responsive and shall note be considered further in tender evaluation”.
1.26 This notice inviting tenders shall also form part of the agreement along with other section of tender documents and agreement conditions.”
It is not in dispute that the offer of the petitioner in the second cover was subject to certain conditions. There may be justifications for making such a conditional offer. But that does not mean that the offer is not conditional. On the teeth of a clear stipulation contained in the notice inviting tenders that conditional offers will not be accepted, the Department was fully justified in not awarding the work to the petitioner.
8. All that apart, the selection notice was issued to the 4th respondent on 9.11.2000, required agreement was executed on 14.11.2000 and the work was started on 16.11.2000. The Original Petition was filed only on 18.11.2000. In such circumstances, it will not be proper for this Court in interfere in exercise of its extraordinary jurisdiction under Art. 226 of the Constitution of India. On that ground also, we do not find any illegality in the judgment of the learned Single Judge.
9. The Writ Appeal fails and it is accordingly dismissed.