Ad World A Partnership Firm v. Nagar Nigam Dehradun

I N THE HI GH COURT OF UTTARAKHAND AT NAI NI TAL

HON'BLE THE ACTI NG CHI EF JUSTI CE MR. MANOJ KUMAR TI W ARI AND HON'BLE MR. JUSTI CE VI VEK BHARTI SHARMA

W RI T PETI TI ON ( M/ B) NO. 5 2 4 OF 2 0 2 4

0 7 TH NOVEMBER, 2 0 2 4

AD World, a partnership firm

…… Petitioner

Versus

Nagar Nigam, Dehradun

…… Respondent

Counsel for the petitioner : Mr. Sagar Kothari, learned counsel

Counsel for the respondent : Mr. Ashish Joshi, learned counsel

Th e Cou r t m ade t h e follow in g:

JUDGMENT: ( per Hon 'ble Th e Act in g Ch ief Ju st ice Mr . Man oj Ku m ar Tiw ar i)

Petitioner is an advertising agency. 2) By means of this writ petition, petitioner has sought the following reliefs :

"(i) Issue a writ, order or direction in the nature of certiorari quashing the impugned tender notice dated 26.10.2024 (Annexure No. 3 to this writ petition) as well as impugned e-tender document dated 27.10.2024 (Annexure No. 3 to this writ petition), specifying terms and conditions of tender notice dated 26.10.2024, which are in direct violation

and contravention to the Uttarakhand Procurement Rules, 2017.

(ii) Issue a writ, order or direction in nature of certiorari quashing the term & condition stipulated in clause 3(3) of impugned e-tender document dated

27.10.2024 (Annexure No. 3 to this writ petition) issued in pursuance of impugned tender notice dated

26.10.2024 (Annexure No. 3 to this writ petition), as the same is in violation of the provisions contained under Indian Stamp Act, 1899.

(iii) Issue a writ, order or direction in the nature of certiorari quashing the term & condition stipulated in clause 4(10) of impugned e-tender document dated

27.10.2024 (Annexure No. 3 to this writ petition) issued in pursuance of impugned tender notice dated

26.10.2024 (Annexure No. 3 to this writ petition) to the extent of deposit of earnest money deposit (Tender Security) in violation of Rule 36 of the Uttarakhand Procurement Rules, 2017.

(iv) Issue a writ, order or direction in the nature of certiorari calling for entire records of the tender process in pursuance to impugned tender notice dated

26.10.2024 (Annexure No. 3 to this writ petition) and quashing all the actions taken and decisions made in pursuance of the same."

3)

Petitioner is aggrieved by Clause No. 4(10) of the e-tender document published on

27.10.2024. According to him, the condition contained in Clause 4(10)

is contrary to provision contained in Uttarakhand Procurement Rules, 2017. 4)

Clause No. 4(10) of the e-tender document is extracted hereunder :

"4(10) fufonknkrk dks fufonk esa izfrHkkx djus ls iwoZ leLr rduhdh nLrkostksa dks LdSu dj bZ0 fufonk iksVZy ij viyksM djrs gaq, fufonk esa izfrHkkx djus dh vafre frfFk ls iwoZ fnukad 08-11-2024 dh lka; 4%00 cts rd :0& 71]51]870@& dh /kujkf'k dk;Z izfrHkwfr& lh0Mhtivkjti@ ,Q0Mhtivkjti tks fd ofj"B foRr vf/kdkjh uxj fuxe nsgjknwu ds uke Iyst gksxh dks ewy esa rFkk leLr rduhdh nLrkostksa dh ewy izfr uxj fuxe dk;kZy; esa tek djuk vfuok;Z gSA nLrkost ,oa ewy esa izfrHkwfr&lh0Mhtivkjti@ ,Q0Mhtivkj tek u gksus dh n'kk esa fufonknkrk dks vlQy ekuk tk;sxkA" 5)

According to the petitioner, Municipal Corporation, Dehradun issued tender notice on

26.10.2024, inviting bids from persons interested in award of contract for advertising rights in certain areas within Municipal limits of Dehradun, and the reserve price for the said contract was fixed as Rs.7,15,18,700/ -. He contends that as per Rule 36 of the Uttarakhand Procurement Rules, 2017, the amount required to be deposited by a bidder as tender security / earnest money should not be more than two per cent of the value of the contract subject to minimum of Rs. 75,000/ - where the valuation of the contract is more than rupees 25 lacs. He

further submits that the said provision further provides that earnest money to the extent of three per cent can be required to be deposited by the bidders, if the valuation of the contract is less than rupees 25 lacs. Thus, he submits that as, in the present case, valuation of the contract is more than rupees 700 lacs, therefore, the condition put in the e-tender document asking the bidders to deposit earnest money to the extent of ten per cent of the reserve price is unsustainable in the eyes of law. 6)

Municipal Corporation, Dehradun was granted time to get instructions in the matter. Today, on instructions, learned counsel appearing for Municipal Corporation relies upon a Notification dated 16.02.2016, issued by the Government of Uttarakhand by invoking its rule making power under Section 540 of the U.P. Municipal Corporation Act, 1959 (as applicable in State of Uttarakhand). By the said notification, State Government has framed exhaustive Rules regulating grant of advertising rights by Municipal Corporations. Reliance is placed upon Rule 6(2) of the said Rules, which provides that every person submitting bid for award of contract for advertising right will be required to deposit 10 per cent of the reserve price as earnest money / tender security with his bid. Thus, he submits that the condition challenged

by the petitioner is as per mandate of Rule 6(2) of the aforesaid Rules notified on 16.02.2016, therefore, the challenge to the said condition is without any substance. 7)

Learned counsel appearing for respondent Municipal Corporation, Dehradun further submits that Rule 36 of the Uttarakhand Procurement Rules, 2017, is not applicable in the present case as the said provision is attracted only when a Government department procures goods or commodities from a private supplier. He refers to the expression 'lkexzh' used in Rule 36(1) of Uttarakhand Procurement Rules, 2017. Rule 36 of Uttarakhand Procurement Rules, 2017 is reproduced below for ready reference :

"(1) foKkiu ;k lhfer fufonk i`PNk ds izdj.k esa fufonk nsus ds ckn fufonk okil ysus ;k oS/k vof/k esa fufonk es ifjorZu djus ds lkis{k lqj{kk iznku djus dh n`f"V ls fufonknkrkvksa ls] mudks NksMdj ftUgs fof/k ,o fu;eksa ds fof'k"V izkfo/kkuksa ds vUrxZr NwV nh xbZ gks] fufonk izfrHkwfr (ftls /kjksgj /kujkf'k dgk tkrk gS) yh tk,xhA fufonk izfrHkwfr lkekU;r% lkexzh ds vuqekfur ewY; ds 2 o 3 izfr'kr rd yh tk,xhA izfr'kr dk fu/kkj.k lkexzh ds lEiw.k ewY; ij fuEukuqlkj fd;k tk;sxk %&

(,d) #0 25.00 yk[k rd 3 izfr'kr

(nks) #0 25.00 yk[k ls vf/kd 2 izfr'kr (U;wure #0 75000)

(2) bu njksa dk 'kklu }kjk le;≤ ij iqujh{k.k fd;k tk ldrk gS] /kjksgj /kujkf'k dks fMekUM Mªk¶V] lkof/k tek jlhn] cSadlZ psd] cSad xkjUVh ;k laxBu esa bZ&cSafdx lqfo/kk gksus ij] rnuqlkj fu/kkZfjr Lo:i es tSlk Hkh l{ke izkkf/kdkjh dh lUrqf"V rFkk Øsrk ds fgrksa dh lHkh izdkj ls

lqj{kk ds fy, vko';d gks] tek fd;k tk ldsxkA lkekU;r% /kjksgj /kujkf'k dh oS/krk fufonk dh vafre oS/k vof/k ds i'pkr~ 45 fnu gksxh ijUrq bl vof/k dks vko';drkuqlkj c<+k;k tk ldrk gSA

(3) lQy fufonknkrkvksa dh fufonk izfrHkwfr dh vfUre oS/krk vof/k dh lekfIr ij ;Fkk'kh?kz] ijUrq lEcf/kr foHkkx@izkf/kdkjh }kjk lafonk djus ds mijkUr 30 ¼rhl½ fnu ds vUrxZr gh lEcfU/kr fufonknkrkvksa dks ykSVk nsuh pkfg,A"

8)

The expression 'lkexzh' used in Rule 36 is defined in Rule 2p of Uttarakhand Procurement Rules, 2017. Rule 2p of said Rules is reproduced hereunder for ready reference :

"2(p) 'lkexzh' ls lHkh oLrq,a] mRikr] inkFkZ] i'kq/ku] QuhZpj] fQDlpj] dPpk eky] dy iqtsZ] midj.k] e'khusa] vk/kksfxd l;a=] okgu] gokbZ tgkt] nokbZ;ka] vewrZ mRikn tSls lkW¶Vos;j VsDukWykWth LFkkukarj.k] ykblsalt] ys[ku lkexzh ¼LVs'kujh½ vkfn vfHkizsr gSaA lkexzh ds varxZr dk;Z ,ao lsok;sa tks bl izdkj ds lkexzh dh vkiwfrZ ds fy, vko';d gS] tSls fd <qyku] chek] bULVkWys'ku ,ao dfef'uax] izf'k{k.k ,ao j[kj[kkoA ijUrq ;g fd iqLrdky; ds fy, Ø; dh tkus okyh iqLrd] izdk'ku] if=dk,a vkfn blesa lfEefyr ugh gksaxhA"

9)

Thus, counsel appearing for the Municipal Corporation submits that here the tender was issued by the Municipal Corporation, Dehradun for award of contract for advertising rights, which is totally different from a contract for procurement of goods or commodities. He further submits that provision contained in Rule 36 of the Procurement Rules is in the nature of guidelines and it

cannot be read as a mandatory condition, violation whereof may nullify the tender process. He submits that the present case is regarding grant of advertising rights which is not akin to procurement of goods, therefore, applicability of Rule 36 is doubtful. Moreover, the field is covered by special law framed by the State Government in exercise of its rule making power under Section 540 of the U.P. Municipal Corporation Act, 1959, therefore, the provision contained in the general law would not be applicable. The condition impugned by petitioner has the backing of Rule 6(2) of the aforesaid Rules notified by State Government on 16.02.2016. 10) Rule 6(2) of the Notification dated 16.02.2016 is extracted here-in-below for ready reference :

"6¼2½ foKkiudrkZ }kjk izLrkfor izhfe;e dh 10 izfr'kr /kujkf'k izfrHkwfr ds :i esa fufonk izi= ds lkFk tek djuh vfuok;Z gksxhA"

11) This Court finds some substance in the submission made by learned counsel appearing for the respondent Municipal Corporation, Dehradun that Rule 36 of Procurement Rules 2017 would be attracted while awarding contract for supply of goods. Moreover, the condition of the tender document is as per the statutory Rules framed by State Government, which deal with

award of contract of advertising rights alone. The said Rules are applicable only to Municipal Corporations established under Municipal Corporation Act and the Rules have been framed in exercise of rule making power under Section 540 of the Municipal Corporation Act. Thus, these Rules are special in nature, which will override the General Law. Therefore, the condition mentioned in Clause 4(10) of the e-tender document, cannot be said to be arbitrary or illegal. 12) Even otherwise also, the said condition would apply across the board to all interested persons, who submit bid for award of contract for advertising rights. Therefore, no special prejudice is going to be caused to the petitioner. Every organization, Government or otherwise, before entering into contract with other persons, is entitled to put such conditions in the Notice Inviting Tender, as are deemed necessary to safeguard its interest. Many a times, it is seen that bidders with weak financial status or bidders who are not serious in doing the work, succeed in getting a contract, however, they are not able to cope with the work pressure and they abandon the work midway, resulting in difficulty and financial loss to the employer. Thus, to safeguard the interest of Municipal Corporation in the matter of grant of advertising

rights, State Government has provided in the Statutory Rules that every bidder should deposit tender security / earnest money to the tune of 10 per cent of the reserve price. The said condition cannot be said to be unjust or discriminatory, especially when it has the statutory backing of Rule 6(2) of the Rules applicable to Municipal Corporations. Thus, there is no scope for interference with the impugned tender notice dated 26.10.2024, as well as e-tender document dated 27.10.2024.

13) For the reasons stated, this writ petition is liable to be dismissed. The same is, accordingly, dismissed. No orders as to cost.

_________________________

MANOJ KUMAR TI W ARI , A.C.J.

_ _ _ _ _ _ _ _ _ _

VI VEK BHARTI SHARMA, J.

Dt: 7TH NOVEMBER, 2024 Negi

HIMANS HU NEGI DN: c=IN, o=HIGH COURT OF UTTARAKHAND, ou=HIGH COURT OF UTTARAKHAND,

2.5.4.20=bb3b60774012c1ef1dae20d13aaf116e7 3351fdaf6878326386908a7f90d5757, postalCode=263001, st=UTTARAKHAND, serialNumber=75BD9D0FB7F4A80990FC51A722 A6BC552D470EB4FD2F88DDF7C18DB2A1524A4 D, cn=HIMANSHU NEGI Date: 2024.11.12 15:46:21 +05'30'