PURXOMOMA RAMANATA QUENIN versus MAKAN KALYAN TANDEL & ORS.

Citation: [1974] 3 S.C.R. 64 · Decided: 09-01-1974 · Supreme Court of India · Bench: HANS RAJ KHANNA · Disposal: Appeal(s) allowed

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Judgment (excerpt)

64 
PURXOMOMA 
RAMANATA 
QUENIN 
v. 
MAKAN KALYAN TANDEL & ORS. 
January 9, 1974 
[H. R. KHANNA, V. R. KRISHNA !YER AND R. S. SAR.KARIA, JJ.] 
Constiturio11 of India, Art. 14-Contracts with' the Government-Uast of dis-
tillery owned by the State to. members of public by tenckr-Government reser;ing-
right to select any tender or re,,1ect a/I te11ders without assigning any reason-No vlolaJiolt 
of Art. 14. 
A 
B 
Words and phrases-" Auction" and "Jnvliation to tender"-Distinction betwein-
Legislative dip/01na No. 1761, Art. 9 para 2 frame~ by Portuguese Govern~nt. · 
C 
The Union territory of (Joa; Daman and Diu invited tenders on behalf of the 
President of India from the public for the lease pf the Daman distillery for a period 
of three years. Clause 7 of the tenns and conditions of the tender appended to 
the notice provided that the highest iender shall ordinarily ~ accepted but the 
Government reserved the right to select any tender or reject all tenders without 
assigning any reason therefor. The appellant tendered Rs. 
3,25,000/· while res-
pondent No. I offered Rs. 3,51,545/· The le1s: of th~ distillery was granted to 
appellant for Rs. 3,52,545/· Rs. 1000/- more than th~ amount mentioned. in the 
~ 
tender of respondent No. I, .On challenge to the legality of the grant of lease by 
Respondent No. 1 thourgh a writ petition, the Judicial Commissioner of Goa set 
aside the lease in favour of appellant No. 1 and directed the Government tc~ deal 
with the tender of respondent No. I according to law. The main reason which 
weighed with the learned Judicial Commissioner was the su~on made on behalf 
of the State that it was prepared, without accepting the correctness of the con. 
tention5 of Respondent No. I, to set aside the lease, if the Court So desired. The 
Judicial Cornmissioner also held !hat clause·? of the notice wa~ ultra v~. that givi:ng 
E. 
lease to the appellant by accepttng more money than the highest bid by a private 
deal was contrary to law and not assigning reasons for the rejection of the tender 
of 1espondent No. 1 was illegal. (680} 
A.llo..ylng the appeal b)' special leave, 
HELD: (1) The Judicial Corr'unissioner should not have, without giving some 
cogent reason set aside the lease of the distillery in favour of the appellant. The 
main reason v.'.·hich weighed with the learned Judki~l Commissioner in setting aside 
the lease in fa~our of the appellant was the submi~ion made on behalf of_thc State 
that it was prepared. without accepting the correctness of the contentions of res-
pondent No. 1, to set aside the lease if the Court so desired. This circun15tance 
was hardly sufficient to warrant the setting aside of the lease in favour of the appcl. 
]ant. The person who was primarily affected by the setting aside of the lease was 
the appellant to whon1. the lease had been granted. Io the absence of any con· 
currence of the appellant, the fact that the Government was prepared, if the Court 
so desired. to set aside the lease, could hardly provide valid basis for tlie seltif'lg: 
aside of the lea~c. [ 680} 
01) Regarding the question of the validity of clause 7 and the grant of lea_se in 
favour of the appellant even though the tender of respondent- No. 1 was for the 
highest amount, the matter is not res integta and is more or less concluded by the 
pronouncements of this court. The view taken by this-Court is that a condition 
like that contained in clause 7 produced above is not violative of Article 14 of the 
Constitution and that in matters relating to contracts with the Government, the 
latter is not bound to accept the tender of the person who offers the highest amount. 
The circumstance that those cases were decided in the context of certain statutory 
~ provisions would not detract from the bindina effect of the general principles eoun-
,. c.lated in those i;ases. [68F; 71HJ 
F 
G 
B 
•· 
·1 
A 
• 
• 
r-
B 
...,, 
c 
D 
E 
F 
G 
H 
\ 
.P. R. 
0QUENIN v. M. K. TANDEL (Khanna, J.). 
6 s; 
C. K. Achuthan v. The-State of Kera/a and others [1959] Suppl. 1 S.C.R; 7_87, . 
Trilochan Afishra etc. v. State o/Orissa and Ors. [1971]3 S.C.C. 153.State o/f:?nssa 
and Ors. v. Harinarayan Jaiswal and others, [1972] 2 S.C.C. 
36. 
Coover1~e· B. 
Bharucha's case [1954] S.C.R. 873 and Union af India and Ors. v. M/s Bh1msert 
Walaiti Ram, [1970] 2 S.C.R. 594, relied on. 
Cehtufy Spinning & Mfg. Co. ~d anr. v. The Ulhas~gar Municipal Council & 
Anr. [1970] 3 S.C.R;854, Rashbihar Panda etc. v. StateofOri

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