ORDER
1. Delay in the appeal is condoned.
2. The appeal is taken up today for consideration and final disposal with the consent of the parties.
3. On the 10th September, 1999 Central Coal Fields Ltd., Darbhanga House, Ranchi issued a notice inviting tender (NIT) with respect to the “rate contract” for transportation of coal and washery products. The NIT contained various terms and conditions but in this case we are concerned with Condition No. 8.0 only which reads as under :
“8.0 Tenders will be received at the Office of Chief General Manager (Transport), Central Coalfields Limited, Ranchi on 14.10.1999 up to 11.00 a.m. and will be opened on the same date at 11.30 a.m. Or any other day and time in presence of the tenderers or their authorised representatives who desires to be present.”
4. Chapter II of the Tender documents
submitted by the appellant writ petitioner
pursuant to the aforesaid NIT contained
various clauses; Clause 17 being as under :
“17. The quotations shall be valid
for a minimum period of three months
from the date of opening of the tenders
but the validity of the same shall be
extended by the tenderer upto six
months, if so required by the Company.”
5. On 28th April, 2000 the respondents issued a letter of Intent requesting the appellant to commence the work on the rates mentioned in the said letter. It is this letter which has given rise to the controversy forming the subject matter of the present appeal.
6. The appellant challenged the aforesaid letter by filing C.W.J.C. No. 1344/2000 (R) only on the ground that as per clause 8 of NIT (supra) the date of opening of the tender was 14th October, 1999 and as per clause 17 of the Tender papers (supra), the quotation submitted by the appellant (the
rate offered by it for transportation) was valid for a period of three months from the date of opening of the tender, or the validity thereof could be extended maximum up to six months, if so “required” by the Company. The appellant’s contention before the learned single Judge was that since clause 8 specified 14th October as the date of opening of the tender, validity period of the rates/quotations offered by it stood expired on 13.1.2000 and even if the same could be considered to have been extended by another three months, it still stood expired on 13.4.2000, but since the letter of intent was issued on 28th April, 2000, the same being beyond the period of six months, the appellant could not be held bound to execute the work of transportation at the rates that it had offered.
7. The contention of the respondents before the learned single Judge was that even though the first part of the tender documents, being the technical bid etc. was opened on 14.10.2000, the second one being the price part could not be opened on that date because on that date itself a civil Court served upon the respondents an injunction restraining the respondents from proceeding any further in the matter. This absolute injunction was first partly modified on 23rd December, 1999 when the respondents were permitted to open the second part and process the tender papers (but not to pass any final order). It was only 27th April, 2000 that the injunction was vacated and they issued letter of intent on 28th April, 2000.
8. Coming back to the Letter of Intent dated 28th April, 2000, the cause of action for the appellant to file the writ application was that since the appellant despite the aforesaid Letter of Intent did not agree to execute the work of transportation at the rates as originally offered by it, the respondents passed an order adverse to the appellant whereby the earnest money deposited by the appellant was forfeited, penalty to the extent of Rs. 2.81 lakhs was sought to be recovered and the appellant was black-listed for any future transportation contract for next three years. The appellant challenged this order by filing the writ application. Even though the learned single Judge set aside that part of the order whereby the appellant was blacklisted, with respect to other two adverse parts of the order, he refused to interfere and hence disposed of the writ application. Aggrieved, the appellant has filed the present appeal before us under Clause 10 of the Letter Patent.
9. The contract in question was a pure and simple rate contract for transportation of coal washery products. By its very essence, a rate contract always depends upon prevailing market conditions as these would operate on the date of submission of the tenders. The transportation work being mainly dependent on fuel and various other factors, any party while submitting a tender with respect to such a work is always conscious of the prevailing market conditions, the pricing and the rates structure as on the date of submission of the tenders. Various elements and components constitute the basis of the offer with respect to a transportation contract. With the passage of time, these elements and components tend to fluctuate. The fluctuation of the rates thus being variable, it is With a view to protect the interest of these tenderers that clause 17 was incorporated in the Tender conditions which clearly stipulate that the quotations as offered would be valid for a period of three months and that in any case the outer limit of such validity was six months, the same also being subject to the Company “requiring” the contractor to accept the validity period upto six months. If in a given case the tenders could not be opened or the work could not be allotted, even for the reasons totally unavoidable and beyond the control of the Company, the contractor can not be burdened with the liability of executing the contract work at a rate which he had offered six months earlier or even prior to that. We have no doubt in our mind that in the present case the respondent could not be blamed for any act of commission or omission on their part. We are clear in our mind that it was because of an order of temporary injunction passed by a civil Court that processing of the tender came to a halt and it was only after the injunction was vacated did the respondents restart tendering process. Even though we cannot blame the respondents for any act of commission or omission, we also cannot blame the writ petitioner-appellant for any act of commission or omission on his part because it is not the case of the respondents
that the delay occurred owing to any such act on the part of the appellant. The appellant in the present case derives his right through condition No 17 of the contract whereby it was clearly understood by the parties that the rates offered by the appellant would be valid for three months initially and six months if so required by the Company. It clearly means that if the appellant was not issued the Letter of Intent within three months it was absolved from its liability to execute the work at the rates that it had offered.
10. In so far as the extension of the validity period from three months to six months is concerned, even on that score the respondents’ case is weak because admittedly at no point of time prior to the issuance of the Letter of Intent, the respondents ever issued any communication whereby they, directly or indirectly “required” the appellant to extend the validity period up to six months. Had the respondents ever issued any such communication to the appellant “requiring” it to extend the validity period, the situation might have been different. In the present case however, on the own showing of the respondent no such “requirement” was ever projected by the respondents to the appellant.
11. Article 14 of the Constitution strikes at arbitrariness and against any unreasonable action on the part of the State. By forcing the appellant to execute the contract of transportation on the rates that it had offered at a point of time six months before the issuance of the Letter of Intent was indeed an arbitrary act on the part of the respondents. The terms and conditions of the contract did not permit the respondents to do so. It appears to us that the aforesaid act of the respondents clearly violated Article 14 of the Constitution.
12. In the facts and circumstances of the case, we are of the view that the impugned order suffered from the vice of arbitrariness and is violative of Article 14 and as such deserved to be quashed and set aside.
13. For the aforesaid reasons therefore, the judgment of the learned single Judge is set aside, this appeal is allowed and the impugned order in its totality is quashed and set aside. No order as to costs.