The appellant, Food Corporation of India, invited tenders for stocks of damaged food grains in accordance with the terms and conditions contained in the tender notice…… Answer with reference to sections of the Indian Contract Act, 1872 and Sale of Goods Act, 1930 and case law, if any.

Question: The appellant, Food Corporation of India, invited tenders for stocks of damaged food grains in accordance with the terms and conditions contained in the tender notice. The respondent tenderer’s bid was highest, but the appellant is not satisfied with the adequacy of the amount offered in the highest tender, instead of accepting any tenders submitted, invited all the tenderers to participate in the negotiations.

For respondent refused to revise the rate offered in its tender. In the negotiation, the appellant was offered an excess amount of Rs. 20 lakhs. The respondent filed a Writ Petition in the High Court challenging the appellant’s refusal to accept the highest tender submitted by it, claiming that the appellant has chosen to invite tenders, it could not thereafter, dispose of the stocks of damaged food grains by subsequent negotiations, rejecting the highest tender on the ground that a higher bid was obtained by negotiations.

This action of the appellant was alleged to be arbitrary and unreasonable. The High Court accepted the contention of the respondent and allowed the Writ Petition. Was the High Court justified in allowing the Writ Petition? Answer with reference to sections of the Indian Contract Act, 1872 and Sale of Goods Act, 1930 and case law, if any. [Punj. JS 2000]

Find the answer to the mains question only on Legal Bites. [The appellant, Food Corporation of India, invited tenders for stocks of damaged food grains in accordance with the terms and conditions contained in the tender notice. The respondent tenderer’s bid was highest, but the appellant is not satisfied with the adequacy of the amount offered in the highest tender, instead of accepting any tenders submitted, invited all the tenderers to participate in the negotiations.

For respondent refused to revise the rate offered in its tender. In the negotiation, the appellant was offered an excess amount of Rs. 20 lakhs. The respondent filed a Writ Petition in the High Court challenging the appellant’s refusal to accept the highest tender submitted by it, claiming that the appellant has chosen to invite tenders, it could not thereafter, dispose of the stocks of damaged food grains by subsequent negotiations, rejecting the highest tender on the ground that a higher bid was obtained by negotiations.

This action of the appellant was alleged to be arbitrary and unreasonable. The High Court accepted the contention of the respondent and allowed the Writ Petition. Was the High Court justified in allowing the Writ Petition? Answer with reference to sections of the Indian Contract Act, 1872 and Sale of Goods Act, 1930 and case law, if any. [Punj. JS 2000]

Answer

The present illustrations are from the case of Food Corporation of India v. Kamdhenu Cattle Feed Industries ((1993) 1. SCC 71) in which the matter when reached before the Supreme Court, it upheld the claim of the appellant, ruling that the concerted action of the appellant be arbitrary and unreasonable. The decision of the court was based on the doctrine of ‘Legitimate Expectation’.

The doctrine of ‘Legitimate Expectations’ is one amongst several tools incorporated by the Court to review administrative action. This doctrine pertains to the relationship between an individual and a public authority. According to this doctrine, the public authority can be made accountable in lieu of a ‘legitimate expectation’. A person may have a reasonable or legitimate expectation of being treated in a certain way by the administrative authorities owing to some consistent practice in the past or an express promise made by the concerned authority.

The Supreme Court elaborated on the nature of the doctrine of legitimate expectations in the present case that the duty to act fairly on part of public authorities, entitles every citizen to have a legitimate expectation to be treated in a fair manner and it is imperative to give due importance to such an expectation in order to satisfy the requirement of non-arbitrariness in state action or otherwise it may amount to an abuse of power. The Court further made a remarkable point that such a reasonable or legitimate expectation may not be a directly enforceable legal right but failure in taking it into account may deem a decision arbitrary. To decide whether an expectation is a legitimate one is contextual and has to be decided on a case-to-case basis.

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Important Mains Questions Series for Judiciary, APO & University Exams

1. Constitutional Law Mains Questions Series Part-I
2. Constitutional Law Mains Questions Series Part-I
3. Constitutional Law Mains Questions Series Part-II
4. Constitutional Law Mains Questions Series Part-IV
5. Constitutional Law Mains Questions Series Part-V
6. Constitutional Law Mains Questions Series Part-VI
7. Constitutional Law Mains Questions Series Part-VII
8. Constitutional Law Mains Questions Series Part-VIII
9. Constitutional Law Mains Questions Series Part-IX
10. Constitutional Law Mains Questions Series Part-X