Mozher Sawdagar (Appellant)
vs.
M.Zahirul Alam, General Manager, Bangladesh Shipping Corporation and others (Respondents)
Supreme Court
Appellate Division
(Civil)
Present:
Badrul Haider Chowdhury J
Shahabuddin Ahmed J
M.H.Rahman J
A.T.M. Afzal J
Judgment
August 24, 1987.
Words and Phrases
Inchoate right means a right that has just begun but not yet developed into maturity. Protection of inchoate right of the tender may be sought when any other tender is, accepted in violation of the conditions of the tender forum. The appellant had submitted tender on 18 December, 1986 and claimed that his tender was the highest. Even if it were the highest offer, he by that offer did not acquire any right to purchase the vessel, as his offer was not accepted by the Corporation which reserved full power to reject any offer, and no agreement was concluded with him…(12 & 16)
Cases Referred to-
M/s. H. Ahmed Vs. M/s. H. D. H. Bros, 32 DLR (AD) 223 and Ummu kawsar Salsabil vs. Shama Corp., 1985 BLD, 263 =37 DLR (AD) 117, R.D. Shetty vs. International Airport Authority, AIR 1979 (SC) 1628.
Lawyers Involved:
Rafiqul Huq, Senior Advocate, (M. Fazlul Haque, Advocate with him) instructed by Md. Aftab Hossain, Advocate on Record. – For the Appellant.
S.R.Pal, Senior Advocate, (Roushan Ali Advocate with him) instructed by M. G. Bhuiyan, Advocate-on-Record.-For the Respondent Nos. 1-3.
Khondkar Mahbubuddin Ahmed, Senior Advocate instructed by Abu Backkar, Advocate-on- Record.- For Respondent No. 4.
Civil Appeal No. 20 of 1987.
(From the judgment and order dated 1-7-87 passed by the High Court Division, Chittagong Sessions, in Civil Revision Nos. 117 and 139 of 1987.)
Judgement:
Shahabuddin Ahmed J. – This appeal by the plaintiff is directed against the High Court Division’s order in revision refusing temporary injunction upon setting aside the concurrent decision of the trial court and the appellate court which had earlier granted the same. The impugned order of the High Court Division is dated 1 July 1987 disposing of Civil Revision Nos 117 and 139 of 1987, Chittagong.
2. Appellant filed Other suit No. 20 of 1987 in the 1st Court of’ Munsif, Chittagong, against respondents Nos. 1 to 3, General Manager and Managing Director of Bangladesh Shipping Corporation and the Shipping Corporation itself, and also against respondent No.4, a bidder and dealer in Iron scraps and stocks. The appellant is also a bidder and dealer in iron scraps, and stock. He filed the suit for declaration that he is the “rightful purchaser of a vessel of the Shipping Corporation named M.V. Banglar Doot, as the highest bidder” and further that the defendant Corporation and its officers “are bound to implement the sale of the vesel to him” in terms of their Tender Notice. Appellant filed an application under Order XXXIX, rules 1 and 2, read with section 151, Civil P.C., for an injunction restraining respondent Nos. 1 to 3 from selling the vessel to anybody including respondent No. 4 till disposal of the suit.
3. Case of the appellant-plaintiff as set out in his plaint is that respondent No.1, General Manager of the Shipping Corporation (respondent No.3), by a public advertisement issued in newspapers invited sealed quotations from interested parties for sale of the vessel “both on cash/credit basis” with a direction that the sealed quotations must reach the Corporation’s office by 12.00 noon of 6 December 1986. Accordingly, the appellant and 10 others including respondent No. 4 submitted sealed tenders within the appointed time and date 6-12-86 which were opened by the Tender Committee of the corporation. The offer of the appellant was found to be the highest and valid at Tk. 2,35,02,500.00 (Taka Two crores thirty five lacs two thousand and five hundred). While he was expecting an order of acceptance of his tender he received a letter dated 12-12-86 (Annexure ‘H’ of paper book of respondent Nos. 1 to 3) from respondent No. 1 indicating invitation of fresh tenders. It was stated in the letter that though the Corporation had invited tenders on “both cash/credit basis” but the appellant’s offer was only on credit basis and that the Corporation would prefer cash offer if it is the highest. Respondent No.1 enquired whether the appellant is interested in making cash offer also, and if so, he might submit fresh offer on cash basis in sealed cover to reach him by 12.00 hours of 18 December 1986. It was further stated in the letter that in case the cash offer “becomes higher than the earlier credit offer” the required earnest money at the rate of 2.50% for the ‘excess amount’ shall also have to be submitted along with the cash offer.
4. The appellant by letter dated 18-12-86 informed respondent No.1 that he was ready to make 100% cash offer “on his previous quoted amount of Tk. 2,35,02,500.00” and also made an enquiry as to what will be “the amount in excess Of our previous quotation”. Similar letters were also addressed to 5 other bidders whose earlier offers like that of the appellant were found valid but were lower than his offer on that day, 6 December 1986. By the appointment date and time the appellant submitted a fresh tender on cash basis raising the amount to Tk. 2,41,66,0007- (Taka Two crores forty one lacs and six thousand). In all, 4 sealed tenders were submitted that day which were opened in presence of the bidders, at 12-15 P.M. The appellant’s offer was found to be the highest and valid; but respondents Nos. 1 and 2, it is alleged, by this time entered into an underhand deal with respondent No. 4 whose offer was this time at Tk. 2,38,00,000.00 and in pursuance of the underhand arrangement declared the offer of respondent No. 4 as the highest showing the ground that the offer of the appellant was submitted beyond the appointed time, that is at 1-30 P.M., and as such, it was excluded from consideration. Respondents Nos. 1 and 2 accepted the lower offer of respondent No.4 and proceeded to deliver the vessel to him. Thereupon the appellant filed the suit and prayed for temporary injunction to stop the delivery of the vessel to anybody including respondent No.4.
5. The application from temporary injunction was resisted by respondents Nos. 1 and 2 and also by respondent No.4 by filing separate written objections. The allegations of underhand deal with respondent No.4 and of malafide intention of respondents Nos, 1 and 2 were denied. So also was denied the claim of the appellant that he was-the highest bidder on 18 December 1986. Their case is that the appellant submitted a tender within the specified time and when all the tenders, four in number, submitted that day, were opened in presence of the bidders including the appellant at 12-15 P.M. it was found that the appellant had reiterated his earlier offer of Tk.2, 35, 02,500.00 with the difference that he made it ‘on cash basis’. As against this offer, the offer of respondent No. 4 was at Tk. 2, 38, crores. The offer of M/s. Joinal & Sons was the highest at Tk. 2.41.05 crores but it stood out of consideration as it was conditional on delayed payment. The offer of respondent No. 4 was therefore held to be the highest. Thereafter the appellant came out with another tender written by hand and submitted it at 1-30 P.M. and it was received by the Tender Committee with an endorsement to this effect therein. Similarly, another tenderer, Rahman Ship Breakers, submitted a tender for Tk. 2.43 crores but it reached the Tender Committee at 1-50 P.M. and was excluded from consideration. The highest and valid tender of respondent No. 4 was accepted and an agreement for sale of the vessel was concluded with him. Respondents further contended that the suit for declaration is not maintainable in that the plaintiff did not acquire any vested right since his offer was not accepted by the authorities which reserved right to reject any tender without assigning any reason.
6. The trial court by order dated 13 January 1987 granted temporary injunction holding, among other things, that monetary compensation would not be adequate in case the plaintiff succeeded in his suit. Both sets of respondents preferred appeals against the order of temporary injunction before the District Judge but became unsuccessful. They then moved the High Court Division under S.115, Civil P.C. challenging the order of injunction. The learned Single Judge expressed doubt about the maintainability of the suit; and as to temporary injunction, observed that no prima facie case for injunction was made out, that the balance of convenience lay in favour of the defendant Corporation, that adequate monetary compensation would be available in case of plaintiff’s eventual success in the suit and that temporary injunction should not be granted against the Corporation which is a Government department. The learned single Judge, by the impugned judgment, set aside the order of temporary injunction. Leave has been granted to consider the question whether the learned Single judge well founded in law and fact in refusing temporary injunction pending disposal of the suit.
7. We have heard lengthy arguments advanced by Mr. Rafiq-ul-Huq, learned Counsel for the appellant. We have also heard arguments made by Mr.S.S. Pal, learned Counsel for respondent Nos. 1 to 3, and by Kh. Mahbubuddin Ahmed, learned Counsel for respondent No. 4. In pursuance of a Tender Notice dated 6-11-86, eleven persons submitted tenders for purchase of the vessel, Banglar Doot, whose official price was stated by the Corporation at Tk. 2.34 crores. Of the 11 tenders, which were opened on 6 December 1986, 5 were rejected outright as invalid, and among the remaining six valid tenders, that of the appellant, Mozaher Sowdagar, was found to be the highest and valid at Tk. 2.35 crores and odd. The offer of respondent No. 4 Siddique Ahmed Sowdagar was at Tk. 2.15 crores, much lower than that of the appellant. Had the highest offer of the appellant been accepted the matter would have been settled then and there. But respondent No. 1, General Manager of the Corporation, who is found to have played the pivotal role in this unhappy drama, addressed a letter dated 12-12-86 (Annexure ‘G-1′ of the Paper book of respondent Nos. 1 to 3) to the appellant and five other bidders opening a Pandora’s box. In the letter it was stated that though the Corporation had invited both Cash/credit offer, all the six valid offers were on credit basis’, that the Corporation would prefer offer on cash basis if it was the highest and valid. Thus fresh tenders in sealed covers were invited again to reach his office by 12.00 hours on 18 December 1986; it was also made clear that in case the fresh offer exceeded the previous offer additional earnest, money on the excess amount should also be paid within that time. In this way the matter was reopened, sealed tenders were again submitted, this time by four out of the six tenders to whom the letter was addressed. None of these tenderers raised any objection to the reopening of the case.
8. The question now is, among the tenders submitted on 18 December 1986, which was the highest? According to the appellant, his was the highest; but according to the respondents, that of respondent No. 4 was the highest. The trial Court took the view that since the tenders received on 6 December 1986 were not cancelled and no fresh Tender Notice was issued thereafter, those tenders were the valid ones and among them the plaintiffs tender was the highest and therefore left the tenders submitted on 18 December 1986 out of consideration. The appellate court namely, the Additional District Judge while agreeing with the trial court, held that the letter dated 12-12-86 of respondent No.1 reopening the matter was malafide, indented to help respondent No.4, and observed that even if the tenders submitted on 18 December 1986 were taken into consideration, still offer of the appellant at Tk. 2.41 cores would be the highest and as such he had the rightful claim to purchase the-vessel.
9. Before the learned Single Judge the question of maintainability of the suit was pressed seriously. It was contended for the defendants that whether the plaintiffs tender was the highest or not and even if it were the highest but was not accepted by the authority, the plaintiff acquired no legal right which could be declared by court. The order of injunction was however sought to be defended by the plaintiff on the grounds that the defendants 1 and 2 acted malafide and that the offer of defendant No. 4 was accepted in violation of the terms of the Tender Notice whereupon the plaintiff acquired an inchoate right for the protection of which he was entitled to get an order of injunction. The learned Single Judge did not accept either of these two grounds.
10. Mr. Rafiq-ul-Huq has criticised the conduct of respondents Nos. 1 and 2, particularly the former, attributing malafides on his part and alleging that he acted behind the screen in order to give the vessel to respondent No.4 depriving the appellant whose offer was the highest on both the occasions, 6-12-86 and 18-12-86. Mr. Rafiq-ul-Huq did not support the views taken by the trial Court and the appellate court that the offers made on 6-12-86 were the only valid offers of whom the appellant’s offer was the highest. Rightly so far, though the offers of 6-12-86 were not specifically cancelled, they stood cancelled by necessary implication when by the letter dated 12 December 1986 the whole issue was reopened inviting fresh quotations on cash bases.
11. According to respondent Nos. 1 to 3 appellant submitted two tenders on 18-12-86, one within time, 12-00 hours and the other beyond time, 1-30 P.M.; in the former he reiterated the previous offer at Tk. 2.35 crores but on cash basis and in the latter he raised the amount to Tk. 2.4106 crores. The former offer was not the highest as shown in the comparative statement of quotations dated 18-12-86 (Annexure ‘D’ of Paper-book of respondent No. 4). This statement contains the names and the amounts of cash offers of 4 tenderers, namely, (1) Mozaher Sowdagar at Tk. 2.35 crores, (2) M/s. Joinal & Sons at Tk. 2.4105 crores, (3) M/s. Rahman Ship Breakers at Tk. 2.36 crores and (4) Siddique Ahmed Sowdagar at Tk. 2.38 crores. Against their names and offers these tenderers put their respective signatures. Offer of No. 2 M/s. Joinal & Sons, though highest, was held invalid by the Tender Committee as it proposed for payment of consideration after 120 days. Therefore, offer of Siddique Ahmed (respondent No. 4) became the highest. But contention of the appellant is that this was not his Tender but it was merely a letter making a query how much excess amount he would be required to pay. But when asked why he had put his signature in that comparative statement’ along with three other bidders, his explanation was that it was a routine matter as every bidder was required to put his signature on the comparative statement. It is alleged that when he submitted this letter dated 18-12-86, (Annexure ‘H’ of the Paper-book of respondent No.3) he was told by the dealing assistants that his letter would not serve the purpose but he was to submit a formal tender; thereupon he submitted his tender which is Annexure ‘E’ of the Paper-book of respondent No.4. In that tender he raised his offer to Tk.2.4106 crores; but this contains an endorsement that it was “received at 1-30 P.M. in presence of the Tender Committee”. It has also been contended on behalf on the respondents that this tender was submitted in a hurry, written by hand, and not ‘typed’ as specifically required in the tender Notice and that it was submitted by the appellant when he found that his earlier tender (Annexure ‘H’) which was opened in presence of all concerned, was found lower than that of other bidders. Kh. Mahbubuddin Ahmed has pointed out that M/s. Rahman Ship Breakers whose bid was at Tk.2.36 crores as per the comparative statement (Annexure ‘D’) came out with another offer at Tk.2.43 crores but it was received at 1-50 P.M. Mr. Rafiq-ul-Huq has made strenuous efforts to show that Annexure ‘H’ mentioning Tk. 2.35 crores was a letter of enquiry and not a tender. As to the query in the letter, it appears that the query relates to the additional earnest money on the “excess amount” of the fresh offer, if any. Mr. Rafiq-ul-Huq contends that the offer in annexure ‘E’ was also submitted before 12.00 noon, but respondent Nos. 1 and 2, with a dishonest motive and acting in collusion with respondent No.4, made the false endorsement therein that it was “received at 1-30 P.M.” This allegation must be considered along with the comparative statement (Annexure ‘D’) which contains appellant’s signature and quotation at Tk.2.35 crores and this is a matter which can be decided during trial only on evidence, and as such, we refrain from making any observation thereon. In view of this position Mr. Rafiq-ul-Huq has concentrated his argument on the question of inchoate right of the appellant which is discussed in the next paragraph.
12. It is contended that offer of respondent No.4 at Tk.2.38 crores is not valid in that it is violative of the terms of the Tender notice. By the letter dated 12-12-86 of respondent No.l 100% cash offer was invited, but offer of respondent No. 4 was on “both cash and credit”, and secondly, it was conditional in that maintenance cost of the vessel during the period from conclusion of contract till delivery of the vessel was to be paid by the Corporation, whereas the tender notice-prohibits any conditional offer. Mr. Rafiq-ul-Huq contends that the offer of respondent No. 4 being violative of terms of the Tender notice it is liable to be rejected whereupon the appellant’s offer being valid and next highest, he has got the right to purchase the vessel. This right is, in legal terminology, called “inchoate right” which may be protected by an injunction. In support of this contention the learned advocate has referred to the principle of law enunciated by this Court in the cases of M/s. H. Ahmed Vs. M/s. H.D. H. Bros, 32 DLR (AD) 223 and Ummu kawsar Salsabil vs. Shama Corp., 1985 BLD, 263 =37DLR (AD) 117 and also by the Indian Supreme Court in the case of R.D. Shetty vs. International Airport Authority, AIR 1979 (SC) 1628. We need not devote considerable time to the question of inchoate right as claimed by the appellant for; the question is a settled one. According to the principle of Inchoate right, even if the appellant’s bid is not the highest, but if it is found that the highest offer of respondent No.4 suffers from any infirmity and has been accepted in violation of the terms and conditions of the Tender then it stands rejected, in which case, the appellant’s offer will be the highest and valid conferring on him a right to purchase the vessel. Inchoate right means a right that has just begun but not yet developed into maturity. In the judgement of 32 DLR this Court observed:
“Had it been the case that the tender was accepted in violation of argument a condition which has been mentioned in the tender form, and then an argument could be advanced for seeking the protection of the inchoate right of the tenderer.”
13. But the question is whether the appellant prima facie made out a case of inchoate right. The learned Single Judge found that this question was not raised in the courts below but was brought before him for the first time by a supplementary Counter-Affidavit at the time of hearing of the revisional application. The learned Single Judge also found that this right was not claimed by the appellant in his plaint, and as such, it was altogether a new issue. The learned Single Judge nevertheless gave due consideration to this contention but did not find prima facie any substance therein. One of the conditions violated by respondent No.4, as alleged, is that in his tender he stated that maintenance cost of the vessel during the intervening period was to be borne by the Corporation. The learned single Judge has observed that this is no violation for, there is no term or condition in the tender notice that the maintenance cost for the interim period shall be paid by the tenderer, but respondent No. 4 suo motu raised this issue. Another condition allegedly violated by respondent No. 4 is that his offer was on both cash and credit basis, whereas offers on 100% credit basis were invited by respondent No. 1 in his letter dated 12 December, 1986.
14. Kh. Mahbubuddin Ahmed contends that the expression ‘both cash/credit’ requires interpretation and explains that respondent No.4 in his offer expressed his readiness to pay either in cash or on credit as the authorities wish and that the authorities in their order of acceptance dated 27 December 1986 (Annexure H (8) of additional paper book of respondent No. 4) upheld this interpretation treating the offer as on 100% cash basis. It is the letter of acceptance which is of fundamental importance and this shows that the acceptance is in conformity with the Tender Notice, learned counsel further explains. The learned Counsel has in this connection referred to the disputed offer of the appellant himself Annexure ‘E’) in which the appellant stated that he is ready to “offer on 100% cash basis as well as credit which you like best.” In view of this position, the learned single Judge is found to have made no error in holding that no prima facie case as to violation of the terms of the tender notice has been made out justifying cancellation of he tender of respondent No.4.
15. Mr. Rafiq-ul-Huq next contends that this vessel is unique in its nature and is the only one available in Bangladesh and as such loss of the appellant cannot be compensated in terms of money. Mr. S.R.Pal, learned Counsel for respondents Nos. 1 to 3, has pointed out that when admittedly the vessel was condemned one and the intending purchasers would scrap and dismantle it for selling its content in order to make profit, monetary compensation would be appropriate remedy for the appellant. This question is found to have receive due consideration from the learned Single judge who held in favour of the respondents. Mr. Rafiq-ul-Huq has criticised the leaned Single Judge for his view that the Corporation being a Government department should not be restrained by injunction from discharging its public duties. Mr. S.R. Pal has explained that the Corporation has been created by statutes for discharging duties of public nature, and that the expression “government department” has been used in a general sense and as such this expression in the judgement hardly affects the decision of the court. Mr. Rafiq-ul-Huq lastly contends that when both the trial court and the appellate court came to a concurrent finding that balance of convenience lies in favour of the appellant and that he is the highest bidder; this finding is immune from interference in revision by the High Court Division. But in view of the facts discussed above we find that the very basis of the finding of the two courts below is a misconception as to which tenders are relevant in this suit. As such the concurrent finding cannot claim any immunity.
16. Having considered the points raised in this appeal, we are clearly of the view that the learned Single Judge had good grounds for reversing the concurrent decision of the courts below. The appellant had submitted tender on 18 December, 1986 and claimed that his tender was the highest. Even if it were the highest offer, he by that offer did not acquire any right to purchase the vessel, as his offer was not accepted by the Corporation which reserved full power to reject any offer, and no agreement was concluded with him. His case therefore falls back only on the allegation of malafides of respondents Nos. 1 and 2 and acceptance of the tender of respondent No. 4 in violation of the term of the Tender Notice. These allegations, as indicated above, are to be examined and determined on evidence during trial.
17. In this connection we think that the whole matter has been mishandled by the General Manager (respondent No.1) even if he had all the sincerity of purpose. Admittedly, the appellant’s offer was the highest among the tenders submitted on the first occasion, 6-6-86. All the tenders were of course on credit basis. If the Corporation insisted on cash offer the General Manager should have made the proposal for cash offer to the highest bidder only at the first instance, and in case he declined, the second highest bidder should have been approached. Again, when he was going to reopen the whole matter, the earlier tenders of 6 December 1986 should have been cancelled straightaway and fresh Tender Notice should have been issued inviting tenders from all persons interested instead of limiting it to the six tenderers. The costly litigation that followed should also have been avoided by the Corporation by cancelling all the tenders submitted on 18 December 1986 and inviting fresh tenders. The procedure, as adopted, which by no means can be appreciated, had resulted in the confusion that followed immediately after 6th December and thereby gave rise to so much misgivings that the matter had to be thrashed out by a prolonged litigation in a court of law. The law of tender and its acceptance is so well settled the Shipping Corporation ought to have taken clue, from these decisions and avoided the chaotic controversy.
18. In the result the appeal is dismissed, without, however, any order as to costs. Stay granted by this Court on 2-7-87 is vacated.
Ed.
Source: 40 DLR (AD) (1988) 62