Ummu Kawsar Salabil Vs. Shams Corporation (Pvt.) Ltd. and ors., 37 DLR (AD) (1985) 117

Case No: Civil Appeal No. 114 of 1984

Judge: F.K.M.A. Munim,

Court: Appellate Division ,,

Advocate: Mr. Rafique-ul-Huq,AY Salehuzzaman,Mr. Maksumul Hakim,,

Citation: 37 DLR (AD) (1985) 117

Case Year: 1985

Appellant: Ummu Kawsar Salabil

Respondent: Shams Corporation (Pvt.) Ltd.

Subject: Words and Phrases,

Delivery Date: 1984-12-4

 
Supreme Court
Appellate Division
(Civil)
 
Present:
FKMA Munim CJ
Barul Haider Chowdhury J
Chowdhury ATM Masud J
Syed Md Mohsen Ali J
 
Ummu Kawsar Salabil
………………….Appellant
Vs.
Shams Corporation (Pvt.) Ltd. and ors.
………….............Respondents
 
Judgment
December 4, 1984.
 
Words and Phrases
Tender
If a tender is accepted in violation of a stipulated condition set down in the tender form, Court’s protection may be sought for.
Since the question for determination before the Trial Court is whether there has been any violation of conditions in the tender notice and since the case is pending for trial expression of any opinion is not called for. Since there has been no violation there is no necessity for seeking the protection of such right and the Court shall not grant any protection where such violation has not been proved. Observations of the High Court Division in this context shall not affect the merit of the case pending for trial before the Trial Court……………..(16 & 17)
 
Cases Referred To-
32 DLR 223 AD; M/s. Hossain Ahmed vs. M/s. H.D. Hossain and Brothers. (1980) 32 DLR 223 AD.
 
Lawyers Involved:
Rafiq-ul-Huq, Senior Advocate, instruc­ted by Syed Sakhawat Ali, Advocate-on-Re­cord—For the Appellant.
Maksum-ul Hakim, Senior Advocate, ins­tructed by Abul Quasem Bhuiyan, Advocate-on-Record—For the Respondent No. 1.
A.Y.Salehuzzaman, Deputy Attorney General, M.R.Khan, Advocate-on-Record-For the Respondent Nos. 2 and 3.
Civil Appeal No. 114 of 1984.
(From the Judgment and Order dated 12-11-84 passed by the High Court Division. Dhaka in F.M.A No.173 of 1984.)
 
Judgment
 
Fazle Munim CJ.
 
This appeal arises from F.M.A. No.173 of 1984.

Plaintiff-appellant instituted Title Suit No. 254 of 1984 against the defendant-respondents before the 1st Court of Subordinate Judge, Dhaka challenging that respondent No.1 who participated in the tender for supply and carrying of fuel oil, lubricant etc. had no licence as required under the Petroleum Rules, 1934. The suit was for permanent injunction restraining defendant Nos.1 and 2 from accepting offer of respondent No.3 for supply of   fuel oil and lubricant. Appellant also filed an application for temporary injunction. The case of the appellant as stated in the plaint is that her tender was the lowest one in respect of tender notice No.131/RHD/Divn.III/83-84 and No.132/RHD/Divn.III/83-84 dated 11.6.84 within the schedule rates. The tender was floated by respondent Nos.1 and 3 for supply and carriage of fuel oil and lubricants up to Taraboi-Dauokandi and Meghna Ghat etc. for the year 1984-85. Respondent No.1 was the lowest bidder in the tender. It was stated that respondent No. 3 had no licence and as such had no locus standi to participate in the tender as per terms of the tender. The learned Subordinate Judge granted temporary injunction by his judgment and order dated 30 August 1984. According to the tender notice sealed tenders were invited from the agents, dealers and distributors of Burmah Eastern, Meghna and Jamuna Petroleum Marketing Co, Ltd. As an additional condition the tenderer was required to have certificate of agency ship and of distributorship of oil- companies otherwise the tender was liable to be rejected. Plaintiff-appellant who claimed to be both dealer of petroleum pro­ducts and also owner of a petrol pump but respondent No.1, according to her, was only an agent. The order of temporary injunction which restrained respondent. Nos. 2 and 3 from issuing any work order in favour of respondent No.1 was passed ex-parte. Against this order respondent No.3 filed an appeal, being First Miscellaneous Appeal No.173 of 1984, before the High Court Division. The learned Judges of the High Court Division directed the parties to maintain status quo till the disposal of the appeal. After hearing the appeal on 12.11.84 the learned Judges of the High Court Divi­sion vacated the order of injunction and allowed the appeal.

2. Being aggrieved by this judgment and order plaintiff-appellant moved this Court and obtained special leave to appeal to consider whether, in view of the fact that respondent No. 1 had no pre-qualification to participate in the aforesaid tender, respondent Nos. 2 and 3 were right in accepting the tender, the same being in violation of the terms of the tender. Further, since in view of the principle stated in 32 DLR 223 AD appellant had the legal right to challenge the acceptance of the ten­der and was entitled to an order of injunction whether the learned Judges of the High Court Division were right in vacating the order   of injunction granted by the trial court.

3. Before considering the contentions of Mr. Rafiqul Huq, counsel for the appellant, that respondent Nos.2 and 3 acted illegally in accepting the tender of respondent No.1 (defendant No.3) being the lowest ignoring the fact that it had no pre-qualification to submit the tender-we may refer to the terms of the tender notice upon which the learned Counsel seems to have built his contention.

"Notice inviting Tender
 Sold to M/S. Shams Corporation (Pvt.) Ltd. Received Taka 26/00. As per Receipt No. do.
Sd/-illegible
Signature of the Cashier.
1. Tender Notice No.13I/RD-1II of 1983-84.
2. Name of work: Supply of fuel including carriage upto Taraboo-Daudkandi Meghna Ghat under Dhitikandi Road Sub-Division dur­ing 1984-85.
3. Estimated cost: Tk. 95, 22,490/-
4. Earnest money: Tk. 1, 90, 450/-In favour of E.E. (RHD) Dhaka. Constn, Road Division III in bank draft from any Schedule Patra. 5 years Bangladesh Sanchay Patra and Bonus Sanchay Patra.
5. Time allowed: Up to 30th June, 198.
6. Last date of Receipt of Tender on
28.6.84 : Up to 12-00 Noon.
1. Sealed tenders in A.D. From No. 2908 along with requisites earnest money are hereby invited form the Agents. Dealers and Distributors of Burma Eastern Meghna & Jamuna Petroleum Marketing Co. Ltd. as per schedule attached and will be received simultaneously by the undersigned, the S.E. (RHD), Dhaka Road circle, Dhaka & Addl Chief En­gineer (RHD), Dhaka upto the time and date as mentioned in item 6 above and will be opened on the same day at 12-05 P.M. in presence of the contractors in the office of Chamber of S.E. (RHD), Dhaka Road Circle, Dhaka, and Addl. Chief Engineer (RHD), Dhaka. Tenders may also be sent under registered cover so as to reach the officer concerned be­fore the time and date, failing which the same will be rejected."
2.  Tender from   .....     of the tender.
3.  The contractor......... as per rule.
4.  This tender notice ... accompany the tender.
5. In any cases, if tenders are called for the 2nd time, the earnest money depo­sited by the tenderers of the 1st call will be retained and the tenderers of the 1st call will be allowed to participate in the 2ad call against their earnest money deposited in 1st call. In such case, the lowest rate of the tenders considering 1st and 2nd call together will be considered for award.
6. The acceptance of the tender will rest with the competent authority who does not bind himself to accept the lowest and reserve the right to reject any or all the tenders without   assigning any reason.
7. That the    .........    Fixed deposit.
Sd/- Illegible
Executive Engineer (RHD)
Dhaka Const, Road Division-III."

4. Appellant's Counsel then also referred to some additional terms and conditions which are as follows:

"ADDITIONAL TERMS AND CONDITIONS
1. The intending...     ...       for finished job.
2. Time allowed...    ...        for 1985-86.
3. Agency showing certificate (original or copy attested by 1st class Govt. Officer) and copy of the distributorship of the oil companies must be submitted with the tender failing which their tender will be liable to outright rejection.
4. Photostat copy…………………treated as incomplete.
5. Photostat copy………………  be cancelled.
6. The delivery……………………use of contents.
7. Quality of fuel………………..verification
8. Fluctuation of………………… Circular
9. The tenderer………………… department
10. The tenderers shall keep reserves Diesel & Petrol and his own cost and risk for regular supply and for any dislocation or short supply the supplier shall be responsible and necessary penalty will be imposed as per discretionary power of the Executive Engineer. 11 to 17......
Sd/- Illegible
Executive Engineer (RHD)
Dhaka Constin. Road Division-III
24.6.84."

5. Whether respondent No.1 has the requisite pre-qualificati6n to submit the tender and whether due to lack of such pre-qualification, if any, the acceptance of the tender by respondent Nos. 2 and 3 has been illegal, without jurisdiction and void is the subject matter of the suit for such declaration. Be­fore us the point for determination is whether the learned Judges of the High Court Division were justified in allowing the appeals from the order of temporary injunction granted by the Subordinate Judge, Dhaka [First Miscellaneous Appeal No. 173 of 1984 was pre­ferred by respondent No.1, and First Miscellaneous Appeal No. Tender 248 of 1984 was preferred by respondent No. 2 and 3 which were heard analogously]. The learn­ed Judges of the High Court Division, in allowing the appeals, vacated the order of temporary injunction. It appears that in granting temporary injunction the learned Subordinate Judge proceeded entirely on a different ground altogether, presumably on the arguments submitted by the Appellant's Coun­sel before him. Reasonings in his judgment appeared to show that the appellant's Counsel contended before him that the respondent No.1’s rates were abnormally below the Government's estimated rates, and this also showed the possibility of corruption and dishonesty. Therefore, according to the Counsel, since respondent No.1 submitted the rates below Government rates, it was "likely to do the business at clear loss for reasons best known to it". The conclusion reached by the Subordinate Judge seems to have been based on the acceptance of the appellant's Counsel's argument that respondent No.1 would in such case do the business dishonestly, either by adulteration of fuel or by pilferage in the supply in collusion with respondent Nos. 2 and 3. Accordingly, the learned Subordi­nate Judge held that such an opportunity to carry on a business dishonestly is barred under section 23 of the Contract Act inasmuch as the same is opposed to the public policy particularly when the transaction is with the Government". He, therefore, found that the appellant had a prima facie case for granting temporary injunction. The grant of injunc­tion by the learned Subordinate Judge is in the following terms:

"It is therefore, Ordered that the prayer for temporary injunction be allowed ex-parte. The defendant Nos.1 & 2 be restrained from issuing any work order in favour of the defendant No.3 and/or accepting any supply of the fuel and lubricants from him, and the defendant No.3 be restrained from taking any work order from the defend­ant Nos.1 & 2 and/or supplying any fuel or lubricant in pursuance of the impugned quotations and tenders during the pendency of the suit. Tide cost shall abide the result of the suit."

6. Before the High Court Division the appellant's Counsel contended, inter alia that since respondent No.1 did not fulfill the qualification to participate in the tender as laid down therein the acceptance of its tender by respondent Nos.2 and 3 was in violation of the conditions of the tender itself. In rejec­ting the contentions of the appellant's Counsel the learned Judges of the High Court Divi­sion held as follows:

"We have considered this argument and the relevant papers and we are of the opinion that the defendant No.'s tender was accepted not in violation of any condition which has been mentioned in the tender form. On the contrary we are of the opinion that prima facie, the defendant No. 3 had the requisite quali­fication in participating in the tender. We have considered the facts and cir­cumstances and the materials on record and we are of the opinion that the plaintiff could not prove her prima facie case as to any legal right of challenging the acceptance of the tender submitted by the defendant No.3 nor she could prove her prima facie case as to her legal right for a declaration for canceling the tender accepted by the authority. In this view of the matter we are of the .opinion that the learned Subordinate Judge was not justified in granting temporary injunction which is hereby vacated."

7. Appellant's Counsel's main ground of attack against the acceptance of the lender submitted by respondent No.1 is that it had no filling station but was only an agent of Meghna Oil Company Ltd. for dealing with non dangerous petroleum products i. e. kerosene, HSD and lubricants as per its agreement with the company and it could not deal in dange­rous petroleum products i.e. petrol which could only be dealt by petrol pump holders, that is, the dealers of oil companies and that it was only the plaintiff-appellant alone who has the qualification for submitting the tender as she was a dealer and an owner of a petrol pump. In order to establish this point the learned Counsel referred to the answer given by respondent No.1 to the interrogatories served upon her by the plaintiff-appellant on 24 September 1984. It says that "the defend­ant No.3 (respondent No.1) is not a licenced dealer of M/s. (Petrol)." His purpose in sho­wing that respondent No.1 is not a dealer in petrol is, as it appears, to establish that resp­ondent No.1 did not fulfill the qualifications prescribed in the tender notice and the addi­tional terms and conditions. According to these terms and conditions respondent No.1 is required to be an agent, a dealer and a dist­ributor of Burma Eastern, Meghna and Jamuna Petroleum Marketing Company Ltd. As the suit is pending for trial in the Court of Subordinate Judge, 1st Court, Dhaka which will be required to put construction on these terms and conditions, we refrain from deci­ding the question raised before us, namely, whether respondent No.1 is to bean agent, a dealer and a distributor at the same time of all the three companies as mentioned-the­rein or it will suffice if it is any one of them, namely, an agent, a dealer or a distributor, in one of the three companies above-named. The appellant's Counsel submitted that the first portion of the prayer is not maintaina­ble but insisted that the second portion of the prayer can be given effect to. The prayer in the plaint runs as follows:

"a decree for declaration that the pl­aintiffs tender is the lowest one in res­pect of tender Notice No.131/RHD/Divn.III/83 84 & 132/RHD/Div.III/83-84 dated 14.6.84 within the Scheduled rate and the tender of defendant No. 3 in malafide, illegal and fraudulent and the acceptance of the said tender of the defendant No. 3 treating illegally as lowest one is also illegal, without jurisdic­tion, null and void and malafide."

8. As to whether plaintiff-appellant was entitled to the grant of temporary injunction pending her suit for the aforesaid declaration, appellant's Counsel relied on the decision of M/s. Hossain Ahmed vs. M/s. H.D. Hossain and Brothers (1980) 32 DLR 223 AD. He referred to paragraphs 4 and 8 of the decision.

9. We shall presently look into the appl­icability of the principles regarding grant of injunction in the case before us, but before doing so reference is needed to the replies made by Mr. Muksumul Hakim, Counsel for respondent No.1. As to the fulfillment of quali­fications laid   down in the tender notice as quoted above, the learned Counsel submitted that respondent No.1 possessed the qualifications. In putting his construction upon the-terms "the agents, dealers and distributors of Burma Eastern, and Jamuna Petroleum, Pump Marketing Ltd.", he submitted that reading the document as a whole it would, be an absurdity to say that they meant that, the tenderer must be all of them at a time in order to qualify for submitting the tender, that is to say, the tenderer should not only be an agent or a dealer he should be  both an agent and a dealer and also a distributor of all the three companies mentioned in the tender notice. The learned Counsel submitted that the requirement as laid down by the afore­said terms is that anyone of the three classes of persons and of any company out of the three companies mentioned could submit the tender. The learned Counsel further submitted that if this construction is found not acceptable, the appellant also has no locus standi to submit the tender, since she is not an agent or distributor, but only a dealer.

10. To show that respondent No.1 fulfilled the qualification to submit the tender, Mr. Hakim took us through the following documents. By the document first cited by him respondent   No.1 was appointed distributor of industrial oil and lubricant.
"MEGHNA PETROLEUM MARKE­TING CO. LTD.
14-15 Motijheel Commercial Area, G.P.O- Box No. 24, Dhaka, Bangladesh.
Tel: PABX, 252014 254091 254094
253040 Cable MEGPETCO. March 7, 1977
M/s. Shams Corporation (Pvt.) Ltd.
29, DIT Avenue,
Motijheel Commercial Area, Dhaka.
In reply please refer to 5600

Appointment as Industrial Oil& Lubricant Dealer.

Dear Sir,
With reference to your application dated 25.2.77 for appointment as Industrial Oil and Lubricant Dealer at Dhaka. We are pleased to appoint you as our ''Distributor" at Dhaka with immediate effect.
We will be supplying you industrial oil and all grades of lubricant for mar­keting depending on the availability of product. However, we expect you will represent us quite adequately in the market.
Please note that all supplies will be made to you against per-payment by DD or Pay Order drawn on banks of the location of supply point.
The company reserves the right to cancel your distributorship at any time without assigning any reason whatso­ever.
We look forward to your working hard to justify our appointment of you as our distributor.
Very truly yours,
Sd/-M.I. Chowdhury,
District Manager, Dhaka."

11. The next document is a licence to carry petroleum in bulk which was renewed upto 31st December, 1984.
"Fresh from licence granted in lieu of expired licence No. 3 (35)/626 dt. 8.9.82
(Article No. 9 Schedule)
Licence for the Transport of Petroleum in Bulk by land
No. 3(35)/657.
Name of Vehicle -------BEDFORD
Registration ------------DHAKA TA-2135
Engine ----------------- 605016
Chasis ------------------44          
Capacity of gallons ----2054 gls.
Names of own­er (s) ----M/S Shams Cor­poration.
This licence is hereby granted to Mr. M/S. Shams Corporation 102 Bashiruddin Road Kalabaghah, Dhaka...in respect of the above vehicle for the carnage of petroleum in bulk by land and under Rule of Petroleum Rules 1937 and the Rules made thereunder. The licence shall remain in force till the 31st day of December, 1984.
The 1st day of November 1984 Plan No. 3(35)/657                  
Sd/-M.M. Ali
11/84
Licensing Authority Inspec­tor of Explosives, Dhaka.
The licence shall be renewable if the vehicle when inspected is found fit provided the previsions of the Petroleum Act, 1934, and the Rules made there­under are not contravened. Complete renewal papers (in plain paper) should reach the Licensing Au­thority on or before 2nd December, every year.''

12. The other document reformed to by the counsel for respondent No.1 was issued in 1982 granting licence to carry petroleum in bulk.

"FORM ‘O’
(Article No. 9 Schedule)
Licence for the Transport of Petroleum
in bulk by land
No. 3(35)/626         Fee Tk.105/00
Name of Vehicle       BEDFORD    
Registration             DACCA TA-2135
Engine No. ...
Cbasis No...
Capacity in Gallons 205/4 gls.
Name of owner (s) ... M/S.  Shams Cor­poration
This licence is hereby granted to Mr.M/s. Shams Corporation...102, Bashiruddin Road, Kalabaghan, Dhaka...in respect of the above vehicle for the carriage of petroleum in bulk by land under Rule of Petroleum Rules, 1937 subject to the provisions of the Petro­leum Act, 1934 and the Rules made there under.
The licence shall remain in force till the 31st day of December, l982.
The 8th day of September, 1982 Plan No.3-(35)/626.                          
Sd/-M. A. Ali
9/9/82
Licensing Authority, Inspector of Explo­sives, Dhaka
The licence shall be renewable if the vehicle when inspected is found fit pro­vided the provisions of the Petroleum Act, 1934 and the Rules made there­ under are not contravened.
Complete renewal papers (in plain paper) should reach the Licensing Auth­ority on or before 2nd December every year."

13. According to the learned Counsel for respondent No.1, these and other documents showed that his client fulfilled the eligibility prescribed in the tender Notice. Further, referring to the provisions of clause 6 of the Tender Notice which provides that the acceptance of the tender will rest with the compe­tent authority who does not bind himself to accept the lowest tender and reserves the right to reject any or all the tenders without assigning any reason, Mr. Hakim submitted that the discretion to accept or reject any tender has been kept beyond any challenge by a tenderer and the competent authority has scrutinised these documents showing the standing of respondent No.1 to submit the tender and upon finding that its tender was in form and lowest accepted it. No exception can, therefore, be taken against the accep­tance of the tender of respondent No.1. On the direction of the authority to deposit additional earnest money respondent No.1 deposited Tk. 5,75j840/- along with all other papers required by the authority for issuing the necessary work orders. On the other hand ap­pellant has not suffered any pecuniary loss so far since she did not-Spend any sum of money as respondent No.1 has done. He also submit­ted that respondent No. 1 was not duly notified by the trial   court as to the date   of hearing of the temporary injunction matter and as such the impugned order of temporary injunction was passed in its absence. Respon­dent No.1 thereafter preferred first Miscellaneous Appeal No.173 of 1984 in the High Court Division, Dhaka which directed the parties to maintain status quo during the pendency of the appeal.

14. After hearing the appeal the tempo-ray injunction granted by the Subordinate Judge was vacated. Since the suit for per­manent in junction is pending before the trial court for its decision, without commenting on the eligibility of respondent No.1 to submit the tender which depends on the fulfillment of the requirements for submitting the same, may be observed that the learned Counsel for respondent No.1 has been able to present a justifiable claim on behalf of his client. It is for the trial court to interpret the terms of the tender notice with reference to the papers produced on behalf of the respective parties in support of their claims. The argu­ment of the appellant's Counsel, regarding the distinction between dealing with non-dangerous petroleum, products i.e. kerosene, HSD and Lubricants and dangerous petroleum product i.e. M/S. (Petrol) which is dealt only by Petrol Pump holders for determining the meaning of the relevant terms of the tender notice may also be considered by the trial Court which will be required to put construction upon those terms.

15. We may not refer to the decision cited before us, namely, M/S Hossain Ahmed vs. M/s H.D. Hossain and Brothers, (1980) 32 DLR 223 AD. Mr. Rafiqul Huq, in citing paragraph 10 of the decision, submitted that the appellant has an inchoate right to chal­lenge the acceptance of the tender submit­ted by respondent No.1 though her tender “has not been accepted. The non-acceptance of her tender has not put an end to her right to challenge the acceptance of the tender submitted by respondent No.1 Obser­vations upon which the learned Counsel placed reliance in support of his contention are as follows:

"The upshot of the discussions shows that by submitting a tender the tenderer is not invested with any legal right nor the quotation by the lowest bidder entit­led him to the right of a contract be­cause such contract is always subject to acceptance and approval of the autho­rity concerned and invariably the tender form contains such stipulations that the authority reserves the right to reject any bid without assigning any reason and is not bound to accept the lowest bid. Had it been the case that the tender was accepted in violation of a con­dition which has been mentioned in the tender form, then an argument could be advanced for seeking the protection of the inchoate right of the tenderer."

16. The learned Counsel has put stress on the last sentence in the paragraph which has been underlined by me. The sentence, as lean understand it, does not decide any point, but merely refers to the possibility of raising an argument for protection of such right of a tenderer if he has only been able to prove that some conditions laid down in the tender notice has been violated prior to accepting the same. Since the question for determination before the trial Court would be whether there has been any violation of conditions laid down in the tender notice, expression of any opinion by us is not called for, It may, however, be observed that where there has been no violation, there is no nece­ssity for seeking the protection of such right, nor will the Court grant such prote­ction where no such violation has been proved.

17. As we are told, that the suit for permanent injunction is pending for decision of the trial Court, some observations made by the learned Judges of the High Court Divi­sion regarding the construction of the tender notice requires modification. Some portions of the observation have already been quoted above. In deciding the case these observations along with some other observations made thereafter as to the legal character of the appellant may not be regarded as binding upon it by the trial Court. Subject to this modifi­cation of the judgment of the High Court Division, the appeal is disposed of’ Trial of the suit is to be concluded on or before 20th December, 1984.

There will be no order as to costs.

Ed.