KANHAIYA LAL AGRAWAL versus UNION OF INDIA

Citation: [2002] SUPP. 1 S.C.R. 284 · Decided: 29-07-2002 · Supreme Court of India · Bench: S. RAJENDRA BABU · Disposal: Appeal(s) allowed

Judgment (excerpt)

A 
KANHAIY A LAL AGRA WAL 
v. 
UNION OF INDIA 
JULY 29, 2002 
B 
[S. RAJENDRA BABU AND P. VENKATARAMA REDDI, JJ.) 
Government Contracts-Supply of material-Invitation of tenders-One 
of the tenderers offering tender with rebate-Acceptance of such tender-
Whether illegal or arbitrary-Held, since such an offer was made at the time 
C of submission of tender and such an offer was given as an additional inducement 
to accept the offer expeditiously the acceptance thereof is not illegal or 
arbitrary. 
In these appeals, the question that arose for consideration was 
D whether the tender offered by the appellant-tenderer with the rebate could 
have been accepted and whether such acceptance would affect the interests 
of any other party. 
Allowing the appeals, the Court 
E 
HELD: 1.1. Bureaucratic delay is a notorious fact and delay in 
finalising tenders will cause hardship to the tenderer. In such 
circumstances, if a hardened businessman makes an attractive offer of 
concessional rates if tender is finalized within a shorter period, it cannot 
be said that the rates offered are offered subject to conditions. The rates 
offered are clear and. the time within which they are to be accepted is also 
F clear. As long as such offer does not militate against the terms and 
conditions of inviting tender it cannot be said that such offer is not within 
its scope. All that is required is that offer made is to be kept open for a 
minimum period of 90 days. Offer in compliance of that term has been 
made by the appellant. The concession or rebate given is an additional 
G inducement to accept the offer expeditiously to have a proper return on 
the investment made by the tenderer in the e~uipment and not keeping 
the labour idle for long periods which is part of commercial prudence. 
The com~rcial aspect of each one of the offers made by the parties will 
have to be ascertained and, thereafter a decision taken to accept or reject 
a tender. [287-E-G) 
H 
284 
KANHAlYA LAL v. U.O.l. [S. RAJENDRA BABU, J.] 
285 
1.2. Appellant made his offer of concessional rates along with the A 
tender while respondent No.5 made such offer after opening of the tenders. 
It is difficult to conceive that respondent No.5 who is a prudent 
businessman would not be aware of commercial practice of giving rebate 
or concession in the event of quick finalization of a transaction. What the 
appellant offered was part of the tender itself while respondent No.5 made B 
such offer separately and much later. There was nothing illegal or 
arbitrary on the part of Railway Administration in accepting the offer of 
the appellant, which was made at the time of submitting the tender itself. 
(288-B-C] 
G.J Fernandez v. State of Karnataka and Ors .. [1990) 2 SCC 488, C 
referred to. 
CIVIL APPELLATE JURISDICTION 
Civil Appeal Nos. 4359-
4361 of 2002. 
From the Judgment and Order dated 27.2.2002 of the Madhya Pradesh 
High Court in LPA No. 173, 198, 211 of 2001at Jabalpur. 
D 
Prakash Shrivastava for the Appellant. 
Anoop Chaudhary and Ranjit Kumar, Shiv Sagar Tiwari, Bishesha 
Nand Jha, Manish Singh vi and Anil Katiyar for' the Respondents. 
The Judgment of the Court was delivered by 
RAJENDRA BABU, J. Leave granted. 
E 
The first respondent invited tenders for execution of five items of work 
including supply, delivery and stacking of75,000 cubic metre Machine crushed 
track ballast as per specifications at its depot in Naurozabad and loading it F 
into railway wagons. The supply period was for 24 months. The conditions 
in the tender notice required that the rates at which supply was to be made 
had to be stated in words as well as in figures against each item of work as 
per Schedule attached thereto; that the tenders submitted with any omissions 
or alteration of the tender document were liable to be rejected; however, G 
permissible corrections could be attached with due signature of tenderers; 
that the tenderer should hold the offer open till such date as may be specified 
in the tender which was for a minimum period of 90 days from the date of 
opening of the tender; that contravention of the conditions would automatically 
result in forfeiture of security deposit; that the tender was liable to be rejected 
for non-compliance of any of the conditions in the tender form. 
H 
286 
SUPREME COURT REPORTS [2002] SUPP. I S.C.R. 
A 
Five tenders were received. The appellant made his tender on 27.02.2001 
with a cove.ring letter that if his offer is accepted within the s

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