Supreme Court Raps Manipur Govt For Not Inviting Fresh Tenders To Transport Grains From FCI Depot To Child Development Project Officers

The Supreme Court on Friday deprecated State of Manipur for lethargy and negligence on the State and Social Welfare Department ("Department") part for not issuing the fresh tender process and Notice Inviting Tenders ("NIT") after 2018 for transporting rice and other micronutrients from Food Corporation of India's depots in the State to offices of Child Development Project Officers.

Considering that since 2017-18 the contract for transportation of rice and other micronutrients under Wheat Based Nutrition Programme ("WBNP") was continuing solely on the basis of interim arrangement without inviting fresh tenders and without entering into permanent contracts, the bench of Justices MR Shah and AS Bopanna observed that,

"At the outset, it is required to be noted that this is a glaring example of lethargy on the part of the State Government in not inviting the fresh tenders for transporting Rice & other micronutrients under the Wheat Based Nutrition Programme (WBNP), from Food Corporation of India's depots in the State of Manipur, to the offices of Child Development Project Officers and to continue the contract without inviting fresh tenders on the basis of the Notice Inviting Tender (NIT) issued on 22.06.2017 causing huge loss to the State and the Public Exchequer."

The Court in (BK Enterprise v State of Manipur and Another) further observed that,

"It can be seen that since 2017-18 the contract for transportation of the rice and other micronutrients under the WBNP to the offices of Child Development Project Officers has been continued solely on the basis of the interim arrangement and without inviting fresh tenders and without entering into any permanent contracts. To continue with the contracts for transportation of rice and other micronutrients within the State without any fresh tenders and by way of an interim arrangement only and at the rates which were prevailing in the year 2017-18 has caused tremendous/huge loss to the State and the Public Exchequer."

The observations were made while the bench was considering an appeal against the Manipur High Court's order dated November 4, 2020 by which the High Court had directed the State and its Department to take up immediate steps and issue fresh NIT for transportation of food grains and Micronutrients under the WBNP within a period of 10 days from the date of receipt of a copy of this judgment and order.

The High Court had also directed for completing the whole tender process including the issuance of work order should be completed within 20days from the date of issue of fresh NIT. As per the Court till the completion of the tender process and issuance of the work orders, the present arrangement for transportation of food grains under the WBNP pursuant to the interim order dated February 19, 2018 had to continue.

Factual Background

The State of Manipur through the Director of Social Welfare Department, Government of Manipur issued a NIT on June 22, 2017 for transporting Rice & other micronutrients under the WBNP, from Food Corporation of India's depots in the State of Manipur, to the offices of Child Development Project Officers.

In its meeting on December 16, 2017 the State's Higher Tender Committee recommended that the acceptable band of rate was Rs.6.265 – Rs.11,635 per MT per KM. It also recommended awarding Route No.8 to RK & Co and further for conducting fresh tender for other routes. The Director of Social Welfare Department, Government of Manipur awarded contracts for all the routes to one RK & Co. by way of interim arrangement till the finalization of the re-tender process.

The appellant ("BK Enterprise") filed a writ petition before the High Court seeking award of tender with respect to route nos. 1,3,5 & 9 alleging inter alia that being the lowest bidder as per Higher Tender Committee's band rate, it should be awarded the contract with respect to route nos. 1,3,5 & 9.

During the pendency of the writ, Director, Social Welfare Department on April 30, 2018 cancelled the Higher Tender Committee's proceedings and recommendations dated December 16, 2017.

The High Court on June 20, 2018 disposed the writ with directions to the State to constitute a High Power Committee to proceed with the tender process afresh from the stage where and after the technical and financial bids opened by the State/Director, Social Welfare Department and it should be completed on or before July 21, 2018.

Aggrieved, the appellant filed a writ appeal before the Division Bench of the High Court. On December 19, 2018 the Division bench directed for equal distribution of the available WBNP rice amongst three contractors, namely, RK & Co., BLL Enterprises and BLL Agency as a temporary arrangement of all nine routes. The State entered into temporary distribution agreements with the aforementioned bidders.

Supreme Court's Observations

While deprecating the action on the part of the State Government and Social Welfare Department the bench took into consideration that even after the directions of the High Court to issue fresh NIT for transportation of food grains and micronutrients under WBNP within a period of 10 days no steps were taken till date.

"Even after the impugned order is passed by the High Court, which has been passed on 04.11.2020, by which the Division Bench of the High Court has directed to take immediate steps and issue fresh NIT for transportation of food grains and micronutrients under the WBNP within a period of 10 days from the date of receipt of the judgment and order and has further directed that the whole tender process including issuance of work orders should be completed within 20 days from the date of fresh NIT, no steps have been taken till date and the contract has been continued which was by way of an interim arrangement only pursuant to interim order dated 19.12.2018, causing further loss to the State. The action on the part of the State Government and the Social Welfare Department of the State of Manipur is highly deprecated. Contracts cannot be continued without finalizing of the tender process and/or without issuing fresh tenders and/or without undertaking the fresh tender process and by way of an interim arrangement only and that too at the rates prevailing in the year 2017-18," Court observed.

While observing that the explanation by the Counsel appearing for the State was vague, the Court further remarked that,

"it prima facie appeared that everybody was happy, namely, the officers of the State Government, more particularly the officers of the Social Welfare Department and the Contractors and it appeared that the State was not interested in issuing fresh NIT."

Directions By Top Court

While disposing the appeal, the bench directed:

• State of Manipur and the concerned Department to issue fresh NIT for appointment of transport contractor under Supplementary Nutrition Programme (SNP), within a period of 10 days from the date of order
• To conduct fresh NIT in a fair and transparent manner through e-Tender
• State of Manipur to submit a compliance report before this Court

The Top Court also asked for invitation of the fresh NIT to be nation-wide.

"It is the duty of the State/concerned Department to see that there is no cartel by the contractors and that the maximum price is received and there is no loss to the Public Exchequer and the State. The entire tender process be completed within a period of six weeks from the date of issuance of the e-Tender."

To avoid inconvenience to the beneficiaries, the Top Court also directed for continuation of the directions issued by the High Court relating to transportation of goods under Supplementary Nutrition Programme (SNP) in order dated December 19, 2018 to be continued till December 31, 2021.

Case Title: BK Enterprise v State of Manipur and Another

Coram: Justices MR Shah and AS Bopanna

Counsels: Senior Advocate Siddhartha Dave appeared for the Appellant and Advocate Pukhrambam Ramesh Kumar for the respondents

Citation : LL 2021 SC 645

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