Gujarat High Court
M/S. Baroda Surgical (India) Pvt. Ltd. ... vs State Of Gujarat on 10 February, 2020
Equivalent citations: AIRONLINE 2020 GUJ 235
Author: Harsha Devani
Bench: Harsha Devani, Sangeeta K. Vishen
C/SCA/23050/2019 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 23050 of 2019
FOR APPROVAL AND SIGNATURE:
HONOURABLE MS.JUSTICE HARSHA DEVANI
and
HONOURABLE MS. JUSTICE SANGEETA K. VISHEN
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1 Whether Reporters of Local Papers may be allowed to No
see the judgment ?
2 To be referred to the Reporter or not ? No
3 Whether their Lordships wish to see the fair copy of the No
judgment ?
4 Whether this case involves a substantial question of law No
as to the interpretation of the Constitution of India or any
order made thereunder ?
==========================================================
M/S. BARODA SURGICAL (INDIA) PVT. LTD. THROUGH ITS CHAIRMAN
AND MANAGING DIRECTOR
Versus
STATE OF GUJARAT
==========================================================
Appearance:
MR PK JANI, SENIOR ADVOCATE with MR SAURIN A MEHTA(470) for the
Petitioner(s) No. 1,2
MR MITUL K SHELAT(2419) for the Respondent(s) No. 2
MS DISHA N NANAVATY(2957) for the Respondent(s) No. 2
MR TIRTHRAJ PANDYA, ASSISTANT GOVERNMENT PLEADER(5) for the
Respondent(s) No. 1
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CORAM: HONOURABLE MS.JUSTICE HARSHA DEVANI
and
HONOURABLE MS. JUSTICE SANGEETA K. VISHEN
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C/SCA/23050/2019 JUDGMENT
Date : 10/02/2020
ORAL JUDGMENT
(PER : HONOURABLE MS.JUSTICE HARSHA DEVANI)
1. Rule. Mr. Mitul Shelat, learned advocate waives service of notice of rule on behalf of the respondent No.2 and Mr. Tirthraj Pandya, learned Assistant Government Pleader waives service of notice of rule on behalf of the respondent No.1.
2. Having regard to the controversy involved in the present case and the urgency of the matter, the court had heard the learned advocates for the respective parties on merits.
3. By this petition under article 226 of the Constitution of India, the petitioners have challenged the decisions/order/scrutiny report of the second respondent Gujarat Medial Services Corporation Limited dated 19.12.2019 in respect of Tender Notice No.GMSCL/D-09/2019-2020, Tender Enquiry No.GMSCL/D-658/RC/2019-20 and seeks a direction to the respondents to consider the price-bid of the petitioners.
3.1 The petitioners also seek a declaration that Condition B
-10 of Tender Enquiry No.GMSCL/D-658/RC/2019-20 to the extent the same provides that, "any criminal case is filed and pending in any court, shall not be eligible to participate for that particular product, in the bid", is arbitrary, illegal, bad in law, unreasonable and violative of the fundamental rights guaranteed under articles 14, 19(1)(g) and 21 of the Constitution of India and, therefore, is non-operative and not binding upon the petitioners.
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4. The petitioner No.1 (hereinafter referred to as the "petitioner - company") is a private limited company registered under the Indian Companies Act, 1956 and is engaged in the business of manufacturing and distribution of surgical dressing items such as bandages, gauze, etc. It is the case of the petitioners that the petitioner company is a regular supplier to the second respondent since 1991 and that till date there has not been any complaint whatsoever in respect of the quality and quantity of the products.
4.1 The second respondent Gujarat Medical Services Corporation Limited (hereinafter referred to as "the GMSCL") is the procuring agency of the Government of Gujarat which procures the drugs, surgical items, etc. from different manufacturers and distributors for the supply of the same to the Government Hospitals throughout the State of Gujarat.
4.2 On 9.11.2019, the second respondent GMSCL floated on- line tenders bearing Tender Notice: D-09/2019-2020 and Tender Enquiry No.GMSCL/D-658/RC/2019-20 (On rate contract basis) from all reputed manufacturers/direct importers of (i) Absorbent Gauze with ISI Mark; (ii) Bandage Cloth with ISI Mark; (iii) Rolled Bandage (5 mt x 5 cm) ISI and (iv) Absorbent Cotton Wool (400 gm). The Tender documents could be downloaded from the website of the second respondent between 9.11.2019 to 30.11.2019 up to 15:55 hours.
4.3 The petitioners, being interested in offering surgical dressing products to the respondents, downloaded the tender documents. In terms of the schedule for the tender process, due date and time for submission of technical bid and Page 3 of 60 Downloaded on : Sun Jun 14 13:54:36 IST 2020 C/SCA/23050/2019 JUDGMENT commercial bid was 30.11.2019 up to 16:00 hours; due date and time of physical submission of technical supporting documents inclusive of document fee and EMD was 2.12.2019 up to 16:00 hours and due date and time of Technical Bid Opening (online) was 3.12.2019 at 15:00 hours.
4.4 It is the case of the petitioners that they had successfully submitted their offer for three items out of four, namely, Absorbent Gauze with ISI Mark, Bandage Cloth with ISI Mark and Rolled Bandage (5mt x 5 cm) ISI on (n) Procure on 30.11.2019.
4.5 It appears that the Drug Inspector, Virudhunagar Range Office of the Assistant Director of Drugs Control, Virudhunagar, had lodged three identical complaints bearing CC No.200419, 200421 and 200424 of 2014 against different parties, including the petitioners for not giving manufacturing details of the products which were got manufactured through the other parties situated at Virdhunagar Range, Tamil Nadu in the Court of the Chief Judicial Magistrate at Srivilliputhur. It is the case of the petitioners that the alleged transactions were of the year 2010-11 for which complaints had been lodged in the year 2014 and the same are pending at the stage of evidence since long. It is the case of the petitioners that in compliance to the schedule of tender for submission of tender documents, the petitioners had submitted the same. It is further the case of the petitioners that they came to know from the website of (n) Procure that four entities including the petitioner - company had submitted the bid. Thereafter on 19.12.2019, the second respondent - GMSCL prepared scrutiny report, whereby the bids of the petitioners for all the three items quoted by them Page 4 of 60 Downloaded on : Sun Jun 14 13:54:36 IST 2020 C/SCA/23050/2019 JUDGMENT were rejected for not disclosing the details in Annexure-IV about pending criminal case before the Court of Chief Judicial Magistrate, Virudhunagar, District : Srivilliputhur, Tamil Nadu. The second respondent had also rejected the bid of Sterling Surgical Company for the reasons stated in the scrutiny report. Against the said order dated 19.12.2019, the petitioners have made a representation to the second respondent on 22.12.2019 requesting the said respondent to reconsider their technical bid and also to open their price bids along with the other bidders.
4.6 Being aggrieved by the action of the second respondent - GMSCL of disqualifying the petitioner- company on the grounds stated in the scrutiny report, the petitioners have filed the present petition.
5. Mr. P.K. Jani, Senior Advocate, learned counsel with Mr. Saurin Mehta, learned advocate for the petitioners, invited the attention of the court to the impugned scrutiny report dated 19.12.2019, to submit that the tender of the petitioners has been rejected for the reason that it has failed to disclose pendency of criminal case before the Court of the Chief Judicial Magistrate, Virudhunagar, District Srivilliputtur, (Tamilnadu) as well as in terms of tender condition B-10. It was submitted that insofar as the allegation of nondisclosure is concerned, the same is based upon clause 14 of Annexure-IV which is the format of affidavit to be submitted by the tenderer. Referring to clause 14, it was submitted that the same does not contemplate disclosure of any criminal proceedings instituted by any other State Government and/or its Board Corporation against the company. It was submitted that, therefore, non-
Page 5 of 60 Downloaded on : Sun Jun 14 13:54:36 IST 2020C/SCA/23050/2019 JUDGMENT disclosure of the criminal case pending in the Court of the
Chief Judicial Magistrate, Virudhunagar, District Srivilliputtur, (Tamilnadu), cannot be considered as a non-disclosure as contemplated in clause 14 of Annexure-IV to the tender documents.
5.1 Insofar as violation of condition B-10 of the eligibility criteria is concerned, it was pointed out that this is the only condition that says that if there is pendency of any criminal case with declaration of spurious and adulterated quality, the person concerned is barred from participating in the tender process. Referring to condition B-10 of the eligibility criteria, it was submitted that for the purpose of invoking this condition, two conditions precedent are required to be satisfied: (i) the product should be declared as of spurious or adulterated quality; and (ii) any criminal case is filed and pending; whereas in the present case, one of the two conditions is not satisfied, inasmuch as while a criminal case is pending, there is no declaration that the product is of spurious or adulterated quality.
5.2 Reference was made to the decision of the Supreme Court in B.S.N. Joshi & Sons Ltd. v. Nair Coal Services Ltd., (2006) 11 SCC 548, wherein the court held thus:-
"39. This brings us to the question as to what would be the meaning of a 'declared defaulter'.
40. The expression 'declaration' has a definite connotation. It is a statement of material facts. It may constitute a formal announcement or a deliberate statement. A declaration must be announced solemnly or officially. It must be made with a view 'to make known' or 'to announce'. [See Prativa Pal v. J.C. Chatterjee, AIR 1963 Cal. 470 at 472]. When a person is placed in the Page 6 of 60 Downloaded on : Sun Jun 14 13:54:36 IST 2020 C/SCA/23050/2019 JUDGMENT category of a declared defaulter, it must precede a decision. The expression 'declared' is wider than the words 'found' or 'made'. Declared defaulter should be an actual defaulter and not an alleged defaulter.
41. When it is proclaimed or published affecting the rights of the parties, in the sense in which it has been used, so far as the affected person is concerned, its effect, would be akin to black-listing. When a contractor is black-listed by a department, he is debarred from obtaining a contract, but in terms of the notice inviting tender when a tenderer is declared to be a defaulter, he may not get any contract at all. It may have to wind up its business. The same would, thus, have a disastrous effect on him. Whether a person defaults in making payment or not would depend upon the context in which the allegations are made as also the relevant statute operating in the field. When a demand is made, if the person concerned raises a bona fide dispute in regard to the claim; so long as the dispute is not resolved, he may not be declared to be defaulter.
42. In M/s Erusian Equipment & Chemicals Ltd. etc. v. State of West Bengal and Another, (1975) 1 SCC 70, this Court stated the law thus :
"20. Blacklisting has the effect of preventing a person from the privilege and advantage of entering into lawful relationship with the Government for purposes of gains. The fact that a disability is created by the order of blacklisting indicates that the relevant authority is to have an objective satisfaction. Fundamentals of fair play require that the person concerned should be given an opportunity to represent his case before he is put on the blacklist."
43. Yet again in Raghunath Thakur v. State of Bihar and Others, (1989) 1 SCC 229, it was opined :
"4. Indisputably, no notice had been given to Appellant of the proposal of blacklisting Appellant. It was contended on behalf of the State Government that there was no requirement in the rule of giving any prior notice before blacklisting any person. Insofar as the contention that there is no requirement specifically of giving any notice is concerned, the respondent is right. But it is an implied principle of the rule of law that any order Page 7 of 60 Downloaded on : Sun Jun 14 13:54:36 IST 2020 C/SCA/23050/2019 JUDGMENT having civil consequence should be passed only after following the principles of natural justice. It has to be realised that blacklisting any person in respect of business ventures has civil consequence for the future business of the person concerned in any event. Even if the rules do not express so, it is an elementary principle of natural justice that parties affected by any order should have right of being heard and making representations against the order"
5.3 It was submitted that filing of a criminal case against the petitioner would itself not amount to a declaration, inasmuch as, the State Government has not given any declaration that the product is of spurious or adulterated quality. It was submitted that in the absence of any declaration of any competent authority that the product is of spurious or adulterated quality, the condition precedents for invoking condition B-10 of the tender documents are not satisfied.
5.4 Next, it was submitted that condition B-10 of the tender conditions is harsh, unreasonable and violative of the right of the petitioner to carry on business as envisaged in article 19(1)
(g) of the Constitution of India. It was submitted that a consequence of condition B-10 of the tender documents is that if the petitioner is black-listed, it would be ineligible for two years; whereas in view of the provisions of condition B-10, the petitioner would be disqualified till the criminal proceeding is over, which may go on indefinitely. It was submitted that in a tender of this nature even if it is not objected to at the threshold, such condition can always be challenged as being violative of fundamental rights. In support of such submission, the learned counsel placed reliance upon the decision of the Supreme Court in ICOMM Tele Ltd. v. Punjab State Water Page 8 of 60 Downloaded on : Sun Jun 14 13:54:36 IST 2020 C/SCA/23050/2019 JUDGMENT Supply and Sewerage Board, (2019) 4 SCC 401, wherein the court held thus:-
"9. It is well settled that the terms of an invitation to tender are not open to judicial scrutiny, as they are in the realm of contract, unless they are arbitrary, discriminatory, or actuated by malice. Thus, in Directorate of Education v. Educomp Datamatics Ltd., (2004) 4 SCC 19, this Court held:
"9. It is well settled now that the courts can scrutinise the award of the contracts by the Government or its agencies in exercise of their powers of judicial review to prevent arbitrariness or favouritism. However, there are inherent limitations in the exercise of the power of judicial review in such matters. The point as to the extent of judicial review permissible in contractual matters while inviting bids by issuing tenders has been examined in depth by this Court in Tata Cellular v. Union of India [(1994) 6 SCC 651]. After examining the entire case-law the following principles have been deduced:
"94. The principles deducible from the above are: (1) The modern trend points to judicial restraint in administrative action.
(2) The court does not sit as a court of appeal but merely reviews the manner in which the decision was made.
(3) The court does not have the expertise to correct the administrative decision. If a review of the administrative decision is permitted it will be substituting its own decision, without the necessary expertise which itself may be fallible.
(4) The terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to tender is in the realm of contract. Normally speaking, the decision to accept the tender or award the contract is reached by process of negotiations through several tiers. More often than not, such decisions are made qualitatively by experts.Page 9 of 60 Downloaded on : Sun Jun 14 13:54:36 IST 2020
C/SCA/23050/2019 JUDGMENT (5) The Government must have freedom of contract. In other words, a fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasi-
administrative sphere. However, the decision must not only be tested by the application of Wednesbury principle of reasonableness (including its other facts pointed out above) but must be free from arbitrariness not affected by bias or actuated by mala fides.
(6) Quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure."
12. It has clearly been held in these decisions that the terms of the invitation to tender are not open to judicial scrutiny, the same being in the realm of contract. That the Government must have a free hand in setting the 6 terms of the tender. It must have reasonable play in its joints as a necessary concomitant for an administrative body in an administrative sphere. The courts would interfere with the administrative policy decision only if it is arbitrary, discriminatory, mala fide or actuated by bias. It is entitled to pragmatic adjustments which may be called for by the particular circumstances. The courts cannot strike down the terms of the tender prescribed by the Government because it feels that some other terms in the tender would have been fair, wiser or logical. The courts can interfere only if the policy decision is arbitrary, discriminatory or mala fide."
15. In ABL International Ltd. v. Export Credit Guarantee Corpn. Of India Ltd., (2004) 3 SCC 553, this Court has held that even within the contractual sphere, the requirement of Article 14 to act fairly, justly and reasonably by persons who are "state" authorities or instrumentalities continues. Thus, this Court held:
"23. It is clear from the above observations of this Court, once the State or an instrumentality of the State is a party of the contract, it has an obligation in law to act fairly, justly and reasonably which is the requirement of Article 14 of the Constitution of India. Therefore, if by the impugned repudiation of the claim Page 10 of 60 Downloaded on : Sun Jun 14 13:54:36 IST 2020 C/SCA/23050/2019 JUDGMENT of the appellants the first respondent as an instrumentality of the State has acted in contravention of the abovesaid requirement of Article 14, then we have no hesitation in holding that a writ court can issue suitable directions to set right the arbitrary actions of the first respondent... xxx xxx xxx
27. From the above discussion of ours, the following legal principles emerge as to the maintainability of a writ petition:
(a) In an appropriate case, a writ petition as against a State or an instrumentality of a State arising out of a contractual obligation is maintainable.
xxx xxx xxx
53. From the above, it is clear that when an instrumentality of the State acts contrary to public good and public interest, unfairly, unjustly and unreasonably, in its contractual, constitutional or statutory obligations, it really acts contrary to the constitutional guarantee found in Article 14 of the Constitution..."
16. Thus, it must be seen as to whether the aforesaid clause 25(viii) can be said to be arbitrary or discriminatory and violative of Article 14 of the Constitution of India.
17. We agree with the learned counsel for the respondents that the aforesaid clause cannot be said to be discriminatory in that it applies equally to both respondent No. 2 and the appellant. However, arbitrariness is a separate and distinct facet of Article 14. In A.L. Kalra v. The Project & Equipment Corporation of India Limited, [1984] 3 S.C.R. 646, this Court turned down a submission that arbitrariness is only a facet of discrimination. The contention of Shri Lal Narain Sinha was recorded thus:-
"17. ...It was urged that in the absence of any specific pleading pointing out whether any one else was either similarly situated as the appellant or dissimilarly treated the charge of discrimination cannot be entertained and no relief can be claimed on the allegation of contravention of Article 14 or Article 16 of the Constitution. It was submitted that the expression discrimination imports the concept of Page 11 of 60 Downloaded on : Sun Jun 14 13:54:36 IST 2020 C/SCA/23050/2019 JUDGMENT comparison between equals and if the resultant inequality is pointed out in the treatment so meted out the charge of discrimination can be entertained and one can say that equal protection of law has been denied. Expanding the submission, it was urged that the use of the expression 'equality' in Article 14 imports duality and comparison which is predicated upon more than one person of situation and in the absence of available material for comparison, the plea of discrimination must fail. As a corollary, it was urged that in the absence of material for comparative evaluation not only the charge of discrimination cannot be sustained but the executive action cannot be struck down on the ground that the action is per se arbitrary."
18. This contention was negatived stating:- "19. ......It thus appears well settled that Article 14 strikes at arbitrariness in executive/administrative action because any action that is arbitrary must necessarily involve the negation of equality. One need not confine the denial of equality to a comparative evaluation between two persons to arrive at a conclusion of discriminatory treatment. An action per se arbitrary itself denies equal of protection by law. The Constitution Bench pertinently observed in Ajay Hasia's case [[1981] 2 S.C.R. 79] and put the matter beyond controversy when it said 'wherever therefore, there is arbitrariness in State action whether it be of the legislature or of the executive or of an "authority" under Article 12, Article 14 immediately springs into action and strikes down such State action.' This view was further elaborated and affirmed in D.S. Nakara v. Union of India [[1983] 1 SCC 305]. In Maneka Gandhi v. Union of India [[1978] 2 S.C.R. 621] it was observed that Article 14 strikes at arbitrariness in State action and ensure fairness and equality of treatment. It is thus too late in the day to contend that an executive action shown to be arbitrary is not either judicially reviewable or within the reach of Article 14."
19. We have thus to see whether clause 25(viii) can be said to be arbitrary and violative of Article 14 of the Constitution of India."
"27. Deterring a party to an arbitration from invoking this Page 12 of 60 Downloaded on : Sun Jun 14 13:54:36 IST 2020 C/SCA/23050/2019 JUDGMENT alternative dispute resolution process by a pre-deposit of 10% would discourage arbitration, contrary to the object of de-clogging the Court system, and would render the arbitral process ineffective and expensive.
28. For all these reasons, we strike down clause 25(viii) of the notice inviting tender. This clause being severable from the rest of clause 25 will not affect the remaining parts of clause 25. The judgment of the High Court is set aside and the appeal allowed."
5.5 It was submitted that the mere fact that no correspondence was entered into and that the petitioner - company had participated in the process, is not a good ground to hold that the petitioners are precluded from challenging the condition.
5.6 Reference was made to the paragraph 4(h) of the tender conditions which says that non-conviction certificate (certificate issued within 12 months before due date of the tender) issued by the concerned Food and Drug Control authority (preferably as per format Annexure XII) and paragraph 4(i) which says that affidavit regarding format of certificates (Annexure-IV). Reference was made to Annexure-IV and more particularly clauses 4, 7 and 14 thereof. It was submitted that in the format of affidavit Annexure-IV, there is no column which requires the bidder to disclose pendency of any criminal proceeding filed by any other State Government or its Boards/Corporations. Under the circumstances, without any such obligation being cast upon the petitioner, it could not have been disqualified.
5.7 On the question as to whether mere pendency of criminal Page 13 of 60 Downloaded on : Sun Jun 14 13:54:36 IST 2020 C/SCA/23050/2019 JUDGMENT proceedings would be sufficient to bar a person from
participating in the bid, the learned counsel placed reliance upon the decision of the Supreme Court in Manoj Narula v. Union of India, (2014) 9 SCC 1, wherein it has been held thus:-
"121. The expression 'criminal antecedents' or 'criminal background' is extremely vague and incapable of any precise definition. Does it refer to a person accused (but not charged or convicted) of an offence or a person charged (but not convicted) of an offence or only a person convicted of an offence? No clear answer was made available to this question, particularly in the context of the presumption of innocence that is central to our criminal jurisprudence. Therefore, to say that a person with criminal antecedents or a criminal background ought not to be elected to the Legislature or appointed a Minister in the Central Government is really to convey an imprecise view.
122. The law does not hold a person guilty or deem or brand a person as a criminal only because an allegation is made against that person of having committed a criminal offence - be it in the form of an off-the-cuff allegation or an allegation in the form of a First Information Report or a complaint or an accusation in a final report under Section 173 of the Criminal Procedure Code or even on charges being framed by a competent Court. The reason for this is fundamental to criminal jurisprudence, the rule of law and is quite simple, although it is often forgotten or overlooked
- a person is innocent until proven guilty. This would apply to a person accused of one or multiple offences. At law, he or she is not a criminal - that person may stand 'condemned' in the public eye, but even that does not entitle anyone to brand him or her a criminal. Consequently, merely because a First Information Report is lodged against a person or a criminal complaint is filed against him or her or even if charges are framed against that person, there is no bar to that person being elected as a Member of Parliament or being appointed as a Minister in the Central Government.Page 14 of 60 Downloaded on : Sun Jun 14 13:54:36 IST 2020
C/SCA/23050/2019 JUDGMENT
123. Parliament has, therefore, in its wisdom, made a distinction between an accused person and a convict. For the purposes of the election law, an accused person is as much entitled to be elected to the Legislature as a person not accused of any offence. But, Parliament has taken steps to ensure that at least some categories of convicted persons are disqualified from being elected to the Legislature. A statutory disqualification is to be found in Section 8 of the Representation of the People Act, 1951. [76] The adequacy of the restrictions placed by this provision is arguable. For example, a disqualification under this Section is attracted only if the sentence awarded to a convict is less than 2 years imprisonment. This raises an issue: What if the offence is heinous (say an attempt to murder punishable under Section 307 of the Indian Penal Code (IPC) or kidnapping punishable under Section 363 of the IPC or any other serious offence not attracting a minimum punishment) and the sentence awarded by the Court is less than 2 years imprisonment. Can such a convict be a member of a Legislature? The answer is in the affirmative. Can this Court do anything about this, in the form of framing some guidelines? "
5.8 Reliance was placed upon the decision of the Madhya Pradesh High Court in Shri Braj Mohan Mahajan v. Bar Council for the State of Madhya Pradesh rendered on 10.9.2018 in WP 11350/2018, wherein the court held that merely because the petitioner was an accused in a criminal case for offences where guilt was yet to be proved, he cannot be denied entry into the State Rolls as advocate for the simple reason that the petitioner for the time being did not incur any disqualification under section 24-A of the Advocates Act.
5.9 The learned counsel further placed upon a judgment and order dated 24.4.2017 passed by a Division Bench of this court in Centre for Development Communication v.
Ahmedabad Municipal Corporation, rendered in Special Civil Application No.4748 of 2017, wherein condition No.3(A) in Page 15 of 60 Downloaded on : Sun Jun 14 13:54:36 IST 2020 C/SCA/23050/2019 JUDGMENT the tender notice disqualified a bidder/tenderer or any of its constituent, partner either debarred or terminated or blacklisted by Central Government organization / AMC / Municipal Corporation / ULB or any agency of Government of India or any of the State Governments. At the same time, disqualification qua any partner, director or proprietor for criminal proceedings pending in any court of law against any of them and result into conviction in last seven years, but prior to that even if conviction is recorded against any of them, it would not be a bar or disqualification. But termination or blacklisting of a firm would result into disqualification. The court was of the view that the above condition was harsh and operated against the petitioner indefinitely making him ineligible to bid for such contracts forever. The court held special condition No.3(A) to be unjust and unreasonable, arbitrary and violative of articles 14 and 19(1)(g) of the Constitution of India.
5.10 It was submitted that the criminal complaint filed against the petitioner is in respect of only item No.1 of the tender notice viz. Absorbent Gauze with ISI mark; whereas with respect to items No.2 and 3, viz. Bandage Cloth with ISI Mark and Rolled Bandage (5mt x 5cm) ISI, there is no complaint. It was submitted that therefore, assuming for the sake of argument that condition B-10 is attracted in the facts of the present case, it can be made applicable exclusively for first product only and not for all the three products.
5.11 Next, it was submitted that the tender conditions disclose an intention to exclude a bidder who has been convicted or blacklisted for a period of one year, and hence, Page 16 of 60 Downloaded on : Sun Jun 14 13:54:36 IST 2020 C/SCA/23050/2019 JUDGMENT merely on account of pendency of a criminal proceeding, a person may not be held to be ineligible for an indefinite period of time. Reference was made to International Covenants of Civil and Political Rights wherein under article 14(2) thereof, it has been provided that if one is charged with a criminal offence he shall have a right to be presumed innocent until proved guilty according to law. It was submitted that every person is deemed to be innocent till he is found to be guilty. Therefore, mere pendency of a criminal case is no ground to hold a person ineligible or disqualified. Therefore condition B- 10 of the eligibility criteria, being violative of the fundamental rights as guaranteed under articles 14, 19(1)(g) and 21 of the Constitution of India, deserves to be set aside.
5.12 Next, it was submitted that even if the validity of condition B-10 of the eligibility criteria is upheld as contended earlier, twin conditions have to be satisfied for invoking condition B-10; whereas in the present case there being no declaration, the requirements of condition B-10 are not satisfied. It was contended that there cannot be a deemed declaration on filing of a complaint.
5.13 It was urged that having regard to all these facts, the petition deserves to be allowed and the reliefs as prayed for deserve to be granted.
6. Mr. Mitul Shelat, learned advocate for the second respondent, invited the attention of the court to the scrutiny report, to submit that the petitioner's tender has been rejected on two grounds; firstly, non-disclosure of details in Annexure-IV about pending criminal case and on the ground of condition B-
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10. The attention of the court was invited to the general instructions for bidders which provides that in case there is any suggestion regarding bid conditions/ specifications/ shelf life, strength packing/ turn over, etc. the suggestion should be submitted/sent/e-mailed two/three days earlier from the date of pre-bid meeting so that the representation of the bidders may be well processed and decision could be taken well in time.
6.1 The attention was also invited to Serial No.B of the tender documents which provides for "Eligibility Criteria" and more particularly to condition 10 thereof, which provides that the concern/firm/company whose product has been declared as of spurious adulterated quality and any criminal case is filed in any court shall not be eligible to participate for that particular product in the bid. Similarly, convicted firm/company shall also not be eligible to participate in the bid.
6.2 Reference was also made to Serial No.C of the tender conditions which bears the heading "Technical Bid" and more particularly to clause (c) of paragraph 6 thereof, which reads thus:
"c) Wrong/fraudulent data submission may lead to disqualification / debarment. Please ensure that you furnish correct data."
Reference was also made to Serial No.F of the tender documents, which bears the heading 'Opening of Technical and Commercial Bid' and more particularly to clause 4(l) which says that the tender is liable for rejection due to submission of misleading/ contradictory/ false statement or information and fabricated/ invalid documents.
Page 18 of 60 Downloaded on : Sun Jun 14 13:54:36 IST 2020C/SCA/23050/2019 JUDGMENT 6.3 Reference was made to Annexure-I to the Tender Documents, which makes provision for "Verification, Undertaking, Checklist and Documents" and requires the tenderer to state that they have verified that they have not been blacklisted/ debarred/ stopped from supply of the items quoted in the Tender Enquiry by any Government Department/ Organization/ undertaking in India and further requires the tenderer to state that, "I/We also take cognizance of the fact that providing misleading or questionable information or failure to furnish correct or true information to you or any other Direct Demanding Officer or failure to comply with any contractual requirement laid down by you / them will be considered as a serious breach of the terms and conditions of the tender and will invite disqualification and other penal action as deemed fit by the Government/ Purchase Committee, G.M.S.C.L.".
6.3 Reference was made to Annexure-IV to the Tender Documents which is the format for filing affidavit and more particularly to conditions (4) and (14) thereof. It was submitted that the factum of pendency of criminal proceedings would have disqualified the petitioner, and non-disclosure thereof would, therefore, entail disqualification. It was submitted that there are provisions in the contract, which have been referred to hereinabove, whereby the ambiguity can be resolved and hence, the petitioner - company having failed to disclose relevant facts in the affidavit, has rightly been disqualified from the tender process.
6.4 It was submitted that the object of clause (14) of Page 19 of 60 Downloaded on : Sun Jun 14 13:54:36 IST 2020 C/SCA/23050/2019 JUDGMENT Annexure-IV is to find out whether any criminal proceeding is pending and that the clause is required to be interpreted by giving preference to form over substance, otherwise the very object of the condition would be defeated. Reliance was placed upon the decision of the Supreme in Charles K. Skaria v. C. Mathew (Dr), (1980) 2 SCC 752, wherein it has been held thus:
"22. The present case is a capital illustration of nominalism battling with realism for judicial success. Both sides admit that the appellants before us had secured diplomas. They further admit (ignoring for a moment the submission on 2% for outsiders) that if the diploma scores were added, the applicants, by the measure of marks, deserve to be selected, provided the diploma obtained in the examination held in 1979 is within time. Then, why did the High Court upset their selection? Because the certificates of diploma were not attached to the applications and communication by the Registrar of the University to the selection committee was an unauthorised mode of proof, deviating from the prospectus, though authentic in fact. Two flaws vitiate this verbally virtuous approach. True the prospectus directs that certificates shall be produced along with the applications for admission. The purpose obviously is to have instant proof of the qualification.
23. We are aware that when a statute vests a public power and conditions the manner of exercise of that power than the law insists on that mode of exercise alone. We are here unconcerned with that rule. A method of convenience for proving possession of a qualification is merely directory. Moreover, the prospectus itself permits government to modify the method, as the learned single Judge has pointed out. In this view, we see nothing objectionable with the government directive to the selection committee, nor in the communication to the selection committee by the university, nor even in their taking into consideration and giving credit for diplomas although the authentic copies of the diplomas were not attached to the application for admission. A hundred Page 20 of 60 Downloaded on : Sun Jun 14 13:54:36 IST 2020 C/SCA/23050/2019 JUDGMENT examples of absurd consequences can be given if the substance of the matter was to be sacrificed for mere form and prescriptions regarding procedures.
24. It is notorious that this formalistic, ritualistic, approach is unrealistic and is unwittingly traumatic, unjust and subversive of the purpose of the exercise. This way of viewing problems dehumanises the administrative, judicial and even legislative processes in the wider perspective of law for man and not man for law. Much of hardship and harassment in Administration flows from over-emphasis on the external rather than the essential. We think the government and the selection committee rightly treated as directory (not mandatory) the mode of proving the holding of diplomas and as mandatory the actual possession of the diploma. In actual life, we know how exasperatingly dilatory it is to get copies of degrees, decrees and deeds, not to speak of other authenticated documents like mark-lists from universities, why, even bail orders from courts and government orders from public offices. This frustrating delay was by-passed by the State Government in the present case by two steps. Government informed the selection committee that even if they got proof of marks only after the last date for applications but before the date for selections they could be taken note of and secondly the Registrars of the Universities informed officially which of the candidates had passed in the diploma course. The selection committee did not violate any mandatory rule nor act arbitrarily by accepting and acting upon these steps. Had there been anything dubious, shady or unfair about the procedure or any mala fide move in the official exercises we would never have tolerated deviations. But a prospectus is not scripture and commonsense is not inimical to interpreting and applying the guidelines therein. Once this position is plain the addition of special marks was basic justice to proficiency measured by marks."
6.5 It was submitted that on a plain reading of the language contained in clause (14) of Annexure-IV, it is evident that the same requires the bidders to make a disclosure with regard to pending criminal case also, and hence, the clause is required Page 21 of 60 Downloaded on : Sun Jun 14 13:54:36 IST 2020 C/SCA/23050/2019 JUDGMENT to be interpreted accordingly by not sacrificing the substance of the matter for mere form and prescriptions regarding procedures.
6.6 Reliance was also placed upon the decision of the Supreme Court in Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corpn. Ltd., (2016) 16 SCC 818, wherein the court held thus:-
"15. We may add that the owner or the employer of a project, having authored the tender documents, is the best person to understand and appreciate its requirements and interpret its documents. The constitutional Courts must defer to this understanding and appreciation of the tender documents, unless there is mala fide or perversity in the understanding or appreciation or in the application of the terms of the tender conditions. It is possible that the owner or employer of a project may give an interpretation to the tender documents that is not acceptable to the constitutional Courts but that by itself is not a reason for interfering with the interpretation given.
16. In the present appeals, although there does not appear to be any ambiguity or doubt about the interpretation given by NMRCL to the tender conditions, we are of the view that even if there was such an ambiguity or doubt, the High Court ought to have refrained from giving its own interpretation unless it had come to a clear conclusion that the interpretation given by NMRCL was perverse or mala fide or intended to favour one of the bidders. This was certainly not the case either before the High Court or before this Court.
17. Under the circumstances, we find merit in the appeals filed by the appellants and set aside the judgment and orders passed by the High Court and restore the decision of NMRCL to the effect that GYT-TPL JV was not eligible to bid for the contract under consideration."Page 22 of 60 Downloaded on : Sun Jun 14 13:54:36 IST 2020
C/SCA/23050/2019 JUDGMENT 6.7 It was submitted that in the light of the principles
enunciated in the above decision, the court would give due deference to the interpretation of the authority, inasmuch as, any other interpretation would make the entire tender document unworkable.
6.8 It was pointed out that the format of affidavit prescribed vide Annexure-IV to the tender document requires the bidder to disclose that he/his company has not filed any writ petition, court matter and there is no court matter filed by the State Government and its Board Corporation, is pending against his company. It was submitted that inherent with disqualification, was an obligation on the part of the bidder to inform about the pendency of criminal proceedings.
6.9 Referring to Instruction No.11 as well as Instruction No.14 of the tender conditions, it was pointed out that there are provisions in the tender document itself to resolve any ambiguity or confusion or to make a representation; however, the petitioners have not raised any query at the pre-bid stage during the tender process. It was submitted that withholding of such material information itself would disentitle the petitioner from being considered and justifies the rejection of the bid.
6.10 Reference was made to a decision of the Supreme Court in Devendra Kumar v. State of Uttaranchal, (2013) 9 SCC 363, wherein the court held thus:-
"12. So far as the issue of obtaining the appointment by misrepresentation is concerned, it is no more res integra.Page 23 of 60 Downloaded on : Sun Jun 14 13:54:36 IST 2020
C/SCA/23050/2019 JUDGMENT The question is not whether the applicant is suitable for the post. The pendency of a criminal case/proceeding is different from suppressing the information of such pendency. The case pending against a person might not involve moral turpitude but suppressing of this information itself amounts to moral turpitude. In fact, the information sought by the employer if not disclosed as required, would definitely amount to suppression of material information. In that eventuality, the service becomes liable to be terminated, even if there had been no further trial or the person concerned stood acquitted/discharged.
13. It is a settled proposition of law that where an applicant gets an office by misrepresenting the facts or by playing fraud upon the competent authority, such an order cannot be sustained in the eyes of law. "Fraud avoids all judicial acts, ecclesiastical or temporal." (Vide: S.P. Chengalvaraya Naidu (Dead) by LRs. v. Jagannath (Dead) by LRs. & Ors., AIR 1994 SC 853. In Lazarus Estate Ltd. v. Besalay, 1956 All E.R. 349, the Court observed without equivocation that ".... No judgment of a court, no order of a Minister can be allowed to stand if it has been obtained by fraud, for fraud unravels everything."
24. In the instant case, the High Court has placed reliance on the Government Order dated 28-4-1958 relating to verification of the character of a Government servant, upon first appointment, wherein the individual is required to furnish information about criminal antecedents of the new appointees and if the incumbent is found to have made a false statement in this regard, he is liable to be discharged forthwith without prejudice to any other action as may be considered necessary by the competent authority. The purpose of seeking such information is not to find out the nature or gravity of the offence or the ultimate result of a criminal case, rather such information is sought with a view to judge the character and antecedents of the job seeker or suitability to continue in service. Withholding such material information or making false representation itself amounts to moral turpitude and is a separate and distinct matter altogether than what is involved in the criminal case."
Page 24 of 60 Downloaded on : Sun Jun 14 13:54:36 IST 2020C/SCA/23050/2019 JUDGMENT 6.11 It was submitted that failure to disclose would operate
as a disqualification qua all the products in respect of which tenders were invited; and that condition B-10 would affect eligibility of the petitioner - company qua the product for which the criminal proceedings are pending.
6.12 Reference was made to the decision of the Supreme Court in State of W.B. v. S.K. Nazrul Islam, (2011) 10 SCC 184, wherein the court held thus:-
"4. Aggrieved, the respondent filed O.A.No.2500 of 2008 before the West Bengal Administrative Tribunal for a direction upon the authorities to issue appointment letter in his favour, but by order dated 25.07.2008 the Tribunal declined to grant any relief to the respondent. The order of the Tribunal was challenged by the respondent before the High Court and in the impugned order, the High Court held that the authorities were not entitled to withhold the offer of appointment to the respondent and directed the authorities to issue the letter of appointment in favour of the respondent without any further delay. The High Court, however, observed in the impugned order that the appointment of the respondent to the post of Constable will abide by the final decision of the pending criminal case.
5. We have heard learned counsel for the parties and we fail to appreciate how when a criminal case under Sections 148/323/380/448/427/506, IPC, against the respondent was pending in the Court of the Additional Chief Judicial Magistrate, Uluberia, Howrah, any mandamus could have been issued by the High Court to the authorities to appoint the respondent as a Constable. Surely, the authorities entrusted with the responsibility of appointing constables were under duty to verify the antecedents of a candidate to find out whether he is suitable for the post of constable and so long as the candidate has not been acquitted in the criminal case of the charges under Sections 148/323/380/448/427/506, IPC, he cannot possibly be held to be suitable for appointment to the post of Constable."Page 25 of 60 Downloaded on : Sun Jun 14 13:54:36 IST 2020
C/SCA/23050/2019 JUDGMENT 6.13 Reliance was also placed upon the decision of the
Supreme Court in Delhi Development Authority v. UEE Electricals Engineering (P) Ltd., (2004) 11 SCC 213, wherein the court held thus:-
"12. Courts are slow to interfere in matters relating to administrative functions unless decision is tainted by any vulnerability such as, lack of fairness in procedure, illegality and irrationality. Whether action falls within any of the categories has to be established. Mere assertion in that regard would not be sufficient.
13. The famous case Associated Provincial Picture Houses Ltd. v. Wednesbury Corpn. (KB at p. 229: All ER p.
682) commonly known as 'The Wednesbury's case" is treated as the landmark so far as laying down various basic principles relating to judicial review of administrative or statutory direction.
14. The law is settled that in considering challenge to administrative decisions courts will not interfere as if they are sitting in appeal over the decision.
15. These principles have been noted in aforesaid terms in Union of India and Anr. v. G. Ganayutham, (1997) 7 SCC 463 and Indian Railway Construction Co.
Ltd. v. Ajay Kumar, (2003) 4 SCC 579. In essence, the test is to see whether there is any infirmity in the decision making process and not in the decision itself.
16. Doubtless, he who seeks to invalidate or nullify any act or order must establish the charge of bad faith, an abuse or a misuse by the authority of its powers. While the indirect motive or purpose, or bad faith or personal ill-will is not to be held established except on clear proof thereof, it is obviously difficult to establish the state of a man's mind, for that is what the employee has to establish in this case, though this may sometimes be done. The difficulty is not lessened when one has to establish that a person apparently acting on the legitimate exercise of power has, in fact, been acting mala fide in the sense of pursuing an illegitimate aim. It is not the law that mala fide in the sense of improper motive should be established only by direct evidence.
Page 26 of 60 Downloaded on : Sun Jun 14 13:54:36 IST 2020C/SCA/23050/2019 JUDGMENT But it must be discernible from the order impugned or must be shown from the established surrounding factors which preceded the order. If bad faith would vitiate the order, the same can, in our opinion, be deduced as a reasonable and inescapable inference from proved facts. (See S. Pratap Singh v. The State of Punjab, [1964] 4 SCR
733). It cannot be overlooked that burden of establishing mala fides is very heavy on the person who alleges it. The allegations of mala fides are often more easily made than proved, and the very seriousness of such allegations demands proof of a high order of credibility. (As noted by this Court in E.P. Royappa v. State of Tamil Nadu and Anr., AIR, (1974) SC 555.)"
6.14 It was submitted that if having regard to the admitted facts, when there is a suppression of material facts and the decision has been taken by the authority, this court would not interfere, more so, when such suppression affects the eligibility of the petitioner.
6.15 Insofar as the challenge to the validity of condition B-10 of the eligibility criteria is concerned, it was submitted that having participated in the tender process, it is not open to the petitioners to first provide incomplete and inaccurate details and then turn around and challenge the condition as being bad. In support of such submission, the learned counsel placed reliance upon the decision of the Supreme Court in Municipal Corporation of Delhi v. Surender Singh, (2019) 8 SCC 67, wherein the court held thus:-
"18. From a perusal of the said clause it is noticed that though under the very clause there is no cut-off marks specified, Clause 25 would, however, provide the full discretion to the DSSSB to fix the minimum qualifying marks for selection. In the instant case, keeping in view that the recruitment was for the post of Assistant Page 27 of 60 Downloaded on : Sun Jun 14 13:54:36 IST 2020 C/SCA/23050/2019 JUDGMENT Teacher (Primary) and also taking note of the orders passed by the High Court in an earlier petition requiring the maintenance of minimum standards, the DSSSB while preparing the select list had stopped the selection at a point which was indicated as the cut-off percentage. In a circumstance where Clause 25 was depicted in the Advertisement No.1/2006, when the private respondents herein and the other petitioners before the High Court were responding to the said Advertisement, if at all they had a grievance that the clause is arbitrary and might affect their right ultimately since no minimum marks that is to be obtained has been indicated therein, they were required to assail the same at that stage. On the other hand, despite being aware of the clause providing discretion to DSSSB to fix the minimum qualifying marks, they have participated in the selection process by appearing for the qualifying examination without raising any protest. In that circumstance, the principle of approbate and reprobate would apply and the private respondents herein or any other candidate who participated in the process cannot be heard to complain in that regard."
6.16 Reliance was also placed upon the decision of the Supreme Court in the case of Union of India v. C. Girija, 2019 SCC OnLine SC 187, wherein the court held thus:-
"18. There is one more aspect of the matter, which need to be noted. The applicant was well aware that under 30% LDCE quota, out of 05 vacancies, 04 are unreserved and 01 is reserved, which was circulated by notification dated 14.10.1999. She applied against the said bifurcated vacancies and was interviewed on 08.01.2001, panel of which was declared on 09.01.2001 and promotion was made on the same day. She having participated in the selection for promotion under 30% LDCE quota and the bifurcation of the vacancies being part of the process of selection, it was not open for her to challenge the bifurcation of vacancies into general and reserved after taking a chance to get selected. In this context, reference is made to judgment of this Court in Ashok Kumar and Another Vs. State of Bihar and Others, (2017) 4 SCC 357. This Court after referring to several earlier judgments Page 28 of 60 Downloaded on : Sun Jun 14 13:54:36 IST 2020 C/SCA/23050/2019 JUDGMENT have laid down following in Paragraph Nos. 13 to 18:-
"13. The law on the subject has been crystallised in several decisions of this Court. In Chandra Prakash Tiwari v. Shakuntala Shukla, (2002) 6 SCC 127, this Court laid down the principle that when a candidate appears at an examination without objection and is subsequently found to be not successful, a challenge to the process is precluded. The question of entertaining a petition challenging an examination would not arise where a candidate has appeared and participated. He or she cannot subsequently turn around and contend that the process was unfair or that there was a lacuna therein, merely because the result is not palatable. In Union of India v. S. Vinodh Kumar, (2007) 8 SCC 100, this Court held that: "18. It is also well settled that those candidates who had taken part in the selection process knowing fully well the procedure laid down therein were not entitled to question the same. (See Munindra Kumar v.Rajiv Govil, (1991) 3 SCC 368 and Rashmi Mishra v. M.P. Public Service Commission, (2006) 12 SCC 724.)"
14. The same view was reiterated in Amlan Jyoti Borooah, (2009) 3 SCC 227, wherein it was held to be well settled that the candidates who have taken part in a selection process knowing fully well the procedure laid down therein are not entitled to question it upon being declared to be unsuccessful.
15. In Manish Kumar Shahi v. State of Bihar, (2010) 12 SCC 576, the same principle was reiterated in the following observations: "16. We also agree with the High Court that after having taken part in the process of selection knowing fully well that more than 19% marks have been earmarked for viva voce test, the petitioner is not entitled to challenge the criteria or process of selection. Surely, if the petitioner's name had appeared in the merit list, he would not have even dreamed of challenging the selection. The petitioner invoked jurisdiction of the High Court under Article 226 of the Constitution of India only after he found that his name does not figure in the merit list prepared by the Commission. This conduct of the petitioner clearly disentitles him from questioning the selection and the Page 29 of 60 Downloaded on : Sun Jun 14 13:54:36 IST 2020 C/SCA/23050/2019 JUDGMENT High Court did not commit any error by refusing to entertain the writ petition. Reference in this connection may be made to the judgments in in Madan Lal v. State of J&K, (1995) 3 SCC 486, Marripati Nagaraja v. State of A.P., (2007) 11 SCC 522, Dhananjay Malik v. State of Uttaranchal, (2008) 4 SCC 171, Amlan Jyoti Borooah v. State of Assam, (2009) 3 SCC 327 and K.A. Nagamani v. Indian Airlines, (2009) 5 SCC 515."
16. In Vijendra Kumar Verma v. Public Service Commission, (2011) 1 SCC 150, 21 candidates who had participated in the selection process were aware that they were required to possess certain specific qualifications in computer operations. The appellants had appeared in the selection process and after participating in the interview sought to challenge the selection process as being without jurisdiction. This was held to be impermissible.
17. In Ramesh Chandra Shah v. Anil Joshi, (2013) 11 SCC 309, candidates who were competing for the post of Physiotherapist in the State of Uttarakhand participated in a written examination held in pursuance of an advertisement. This Court held that if they had cleared the test, the respondents would not have raised any objection to the selection process or to the methodology adopted. Having taken a chance of selection, it was held that the respondents were disentitled to seek relief under Article 226 and would be deemed to have waived their right to challenge the advertisement or the procedure of selection. This Court held that:
"18. It is settled law that a person who consciously takes part in the process of selection cannot, thereafter, turn around and question the method of selection and its outcome."
18. In Chandigarh Admn. v. Jasmine Kaur, (2014) 10 SCC 521, it was held that a candidate who takes a calculated risk or chance by subjecting himself or herself to the selection process cannot turn around and complain that the process of selection was unfair after knowing of his or her non- selection. In Pradeep Kumar Rai v. Dinesh Kumar Pandey, (2015) 11 SCC 493, this Court held that:
"17. Moreover, we would concur with the Division Bench on one more point that the appellants had Page 30 of 60 Downloaded on : Sun Jun 14 13:54:36 IST 2020 C/SCA/23050/2019 JUDGMENT participated in the process of interview and not challenged it till the results were declared. There was a gap of almost four months between the interview and declaration of result. However, the appellants did not challenge it at that time. This, it appears that only when the appellants found themselves to be unsuccessful, they challenged the interview. This cannot be allowed. The candidates cannot approbate and reprobate at the same time. Either the candidates should not have participated in the interview and challenged the procedure or they should have challenged immediately after the interviews were conducted." This principle has been reiterated in a recent judgment in Madras Institute of Development Studies v. K. Sivasubramaniyan, (2016) 1 SCC 454".
6.17 Strong reliance was placed upon the decision of the Orissa High Court in AFR Jagruti Welfare Organisation v. State of Odisha, rendered on 11.5.2018 in W.P. (C) No.457 of 2018, the relevant portion whereof is extracted hereunder:-
"d) Bidder should submit an affidavit to the effect that, the Company has not been Black listed or Barred or terminated by any Central or State Govt./Govt.
Undertakings/ULB during last 5 years in similar work. If any criminal cases are pending against the bidder or member at the time of submitting the bid, then the bid shall be summarily rejected. The bidder shall also submit an affidavit in negation of the above. In case it is detected at any stage that the affidavit is false, he will abide by the action taken by the employer without approaching any court whatsoever for redress."
13. Clause 4.3 (d) of the tender condition clearly specifies that if any criminal cases are pending against the bidder or member at the time of submitting the bid, then the bid shall be summarily rejected. In paragraph 5.23 of the counter affidavit the opposite parties have clearly indicated the status of the criminal cases pending before various courts, which reads as follows:-
"5.23 In due diligence of this clause CMC asked for Page 31 of 60 Downloaded on : Sun Jun 14 13:54:36 IST 2020 C/SCA/23050/2019 JUDGMENT givilance clearance from the vigilance department and the Vig. Department vide letter dated 16.11.2017 furnished the details wherein it was stated that :-
• Vigilance case vide SBP(V) P.S. Case No. 22/14, BBSR (V) P.S Case No. 11/12 has been registered against Sri Smruti Ranjan Parida, Secretary, M/s Jagruti Welfare Organization, BBSR in Sanitation work of Sambalpur Municipality & SWM work of BMC respectively which has communicated vide letter No. 4568/VCO(B) dated 16-11- 2017 by G.A. (Vigilance) Department, Govt. of Odisha. Commissioner, Sambalpur Municipal Corporation has been moved to 27 recovery of loss amount of Rs. 8,41,500/- from the firm M/s. Jagruti Welfare Organisation vide letter No. 1120/Cr(V) SBP dated 18.04.2015. Order has been passed for submission of charge sheet against Sri Smruti Ranjan Parida, Secretary, M/s. Jagruti Welfare Organisation, Bhubaneswar.
• BBSR(V) P.S Case No. 11/12 was registered against the officials of Bhubaneswar Municipal Corporation, Bhubaneswar and M/s Jagruti Welfare Organisation, Bhubaneswar represented by its Secretary Sri Smruti Ranjan Parida on the allegation of submission of false bills during transportation of garbage under Solid Waste Management System. Investigation of the case is in progress.
• SBP(V) File No. 30/11 was initiated against the staff of Sambalpur Municipality for irregularities in purchase of uniform for Scavenging staff of Sambalpur Municipality by violating tender procedure. On completion of enquiry, the Dist. Labour Officer, Sambalpur has been moved vide letter No. 2510/VSS- SBP dtd. 17.6.14 to take action as per Section 7, 12 of Contract Labour (Regulation and Abolition Act) against Sri Smruti Ranjan Parida, Secretary, M/s. Jagruti Welfare Organisation, Bhubaneswar and other officials of Sambalpur Municipality."
The petitioner has not disclosed this fact, thereby acted contrary to the provisions contained in Clause 4.3(d). Rather, this amounts to suppression of fact at the time of submission of bid and, more so, by non-disclosure of such pending criminal cases, the petitioner has tried to Page 32 of 60 Downloaded on : Sun Jun 14 13:54:36 IST 2020 C/SCA/23050/2019 JUDGMENT misrepresent 28 opposite party no.2, thereby it has violated the condition stipulated in the said clause.
14. Much reliance has been placed on the earlier judgment of this Court filed by the petitioner in W.P.(C) No. 15713 of 2016 disposed of on 18.07.2017. The said judgment had been rendered in a petition which was filed challenging the Clause 4.2 of the financial eligibility criteria of the tender condition where the petitioner had not participated in the proceeding itself and after considering the same this Court quashed the said condition stipulated in Clause 4.2(a) of the tender conditions and consequentially set aside the entire tender process and directed for issuing fresh notice inviting tender fixing reasonable financial eligibility criteria taking into consideration the nature and scope of the work to be performed. But in the present case, though argument has been advanced that Clause 4.1.1 (b), the technical eligibility criteria, read with clause 4.3(d), but none have challenged the said criteria including the petitioner. Rather, with eyes wide open and knowing the 29 conditions stipulated in the tender call notice itself, the petitioner participated in the process of tender and having become unsuccessful, challenged the said conditions in the present writ application, which is not permissible in law, as has been held by this Court in Manas Kumar Sahu mentioned supra.
Similar question had come up for consideration in a service matter before the apex Court in Om Prakash Shukla v. Akhilesh Kumar Shukla, AIR 1986 SC 1043 and it has been clearly laid down by a Bench of three learned Judges of apex Court that when the petitioner appeared at the examination without protest and when he found that he would not succeed in examination he filed a petition challenging the said examination, the High Court should not have granted any relief to such a petitioner.
In Madan Lal v. State of Jammu and Kashmir, AIR 1995 SC 1088 the apex Court held that if a candidate takes a calculated chance and appears at the interview then, only because the result of the interview is not palatable to him he cannot turn round and subsequently contend that the process of interview was not fair. In view of the law laid Page 33 of 60 Downloaded on : Sun Jun 14 13:54:36 IST 2020 C/SCA/23050/2019 JUDGMENT down by the apex Court, it is no more res integra that if the petitioner had participated in the tender process, without any objection to the eligibility criteria mentioned in the tender call notice, after become unsuccessful in the tender process, he cannot turn around and challenge the same in this writ application. Therefore, at the behest of the petitioner the writ application is not maintainable."
"16. As per Clause 4.3(d), a bidder is required to submit an affidavit with regard to pendency of any criminal case against its member at the time of submitting the bid. Admittedly, on the basis of the materials available on record, the petitioner has not filed affidavit disclosing the criminal cases pending against it or its member. It is contended that criminal cases starts from the date of filing of the charge sheet and, as such, whatever information the opposite party no.2 had received and on that basis the rejection had been made that could not have been done because in no case charge-sheet has been submitted till date. But there is no dispute with regard to pendency of the criminal cases against the petitioner, as mentioned in the counter affidavit filed by 33 opposite party no.2. Whether the charge-sheet has been submitted or not is not a matter to be considered at this stage, the reason being only to see the bona fides of the person concerned and its antecedent such affidavit is required in terms of clause 4.3(d) of the tender call notice."
"18. In Krishnamoorthy (supra), while considering a case under the Representation of People Act, 1951, the apex Court held that the candidate has to make a declaration in the prescribed Form-26 under Rule 4A of the Conduct of Elections Rules, 1961 the candidate has to give full information with regard to case/First Information Report, number/numbers together with the complete details of the Police Station/District/State concerned. But such 35 information is required in view of the fact that the criminalistion of politics being anathema to sanctity of democracy, voters have fundamental right to know in entirety and in full detail, the antecedents of candidates and concealment, suppression or misinformation about their criminal antecedents deprives voters of making informed choice of candidate which eventually promotes criminalization of politics. For non-disclosure of pendency Page 34 of 60 Downloaded on : Sun Jun 14 13:54:36 IST 2020 C/SCA/23050/2019 JUDGMENT of criminal case, the election was declared to be null and void. Applying the said analogy to the present context, since the condition stipulated in the tender documents Clause 4.3(d) requires that the petitioner has to make a disclosure of criminal cases pending against it or its member, the non- disclosure of the same amounts to rejection of the bid itself summarily."
6.18 It was urged that when there is an eligibility condition, the petitioner - company was required to disclose that it did not satisfy such condition; and not having disclosed such material facts, it is not permissible for the petitioners to subsequently challenge the condition.
6.19 It was, accordingly, urged that (i) on the aspect of standalone disclosure; as well as (ii) on the entitlement to challenge the tender condition after having participated in the tender process, the petition must fail.
6.20 Reliance was placed upon the decision of the Supreme Court in Silppi Constructions Contractors v. Union of India, 2019 SCC OnLine SC 1133, wherein the court held thus:-
"19. This Court being the guardian of fundamental rights is duty bound to interfere when there is arbitrariness, irrationality, mala fides and bias. However, this Court in all the aforesaid decisions has cautioned time and again that courts should exercise a lot of restraint while exercising their powers of judicial review in contractual or commercial matters. This Court is normally loathe to interfere in contractual matters unless a clear cut case of arbitrariness or mala fides or bias or irrationality is made out. One must remember that today many public sector undertakings compete with the private industry. The contracts entered into between private parties are not subject to scrutiny under writ jurisdiction. No doubt, the Page 35 of 60 Downloaded on : Sun Jun 14 13:54:36 IST 2020 C/SCA/23050/2019 JUDGMENT bodies which are State within the meaning of Article 12 of the Constitution are bound to act fairly and are amenable to the writ jurisdiction of superior courts but this discretionary power must be exercised with a great deal of restraint and caution. The Courts must realise their limitations and the havoc which needless interference in commercial matters can cause. In contracts involving technical issues the courts should be even more reluctant because most of us in judges 'robes do not have the necessary expertise to adjudicate upon technical issues beyond our domain. As laid down in the judgments cited above the courts should not use a magnifying glass while scanning the tenders and make every small mistake appear like a big blunder. In fact, the courts must give "fair play in the joints" to the government and public sector undertakings in matters of contract. Courts must also not interfere where such interference will cause unnecessary loss to the public exchequer.
20. The essence of the law laid down in the judgments referred to above is the exercise of restraint and caution; the need for overwhelming public interest to justify judicial intervention in matters of contract involving the state instrumentalities; the courts should give way to the opinion of the experts unless the decision is totally arbitrary or unreasonable; the court does not sit like a court of appeal over the appropriate authority; the court must realise that the authority floating the tender is the best judge of its requirements and, therefore, the court's interference should be minimal. The authority which floats the contract or tender, and has authored the tender documents is the best judge as to how the documents have to be interpreted. If two interpretations are possible then the interpretation of the author must be accepted. The courts will only interfere to prevent arbitrariness, irrationality, bias, mala fides or perversity."
6.21 It was submitted that the scope of judicial review in matters relating to contract is very limited, and that there is nothing on record to even remotely suggest that there is any public interest involved in sustaining the plea canvassed on behalf of the petitioners that condition B-10 is against public Page 36 of 60 Downloaded on : Sun Jun 14 13:54:36 IST 2020 C/SCA/23050/2019 JUDGMENT interest.
6.22 It was contended that the information about criminal proceeding is essential for the authority. It was submitted that it cannot be gainsaid that any condition which disqualifies a bidder having regard to the pendency of criminal proceedings in relation to the tender, cannot be said to be arbitrary, unreasonable, irrational or perverse. It was submitted that in this case the condition restricts the disqualification to the product for which the tender was invited and is, therefore, circumscribed and not an absolute prohibition.
6.23 It was submitted that like in the case of a constable, wherein the Supreme Court held that pendency of criminal proceeding is relevant in the context in which the condition is imposed, similarly, the condition imposed in the present case of disclosing pendency of criminal proceedings which has a direct nexus with the product in respect of which the tender is invited, is just, proper and legal and has been introduced in public interest. Therefore, it cannot be said that disqualification of the petitioner - company is irrational and has no nexus to the object sought to be achieved.
6.24 Reference was made to the decision of the Supreme Court in Michigan Rubber (India) Ltd. v. State of Karnataka, (2012) 8 SCC 216, wherein the court held thus:-
"23. From the above decisions, the following principles emerge:
(a) the basic requirement of Article 14 is fairness in action by the State, and non-arbitrariness in essence and substance is the heartbeat of fair play. These actions are amenable to the judicial review only to the Page 37 of 60 Downloaded on : Sun Jun 14 13:54:36 IST 2020 C/SCA/23050/2019 JUDGMENT extent that the State must act validly for a discernible reason and not whimsically for any ulterior purpose. If the State acts within the bounds of reasonableness, it would be legitimate to take into consideration the national priorities;
(b) fixation of a value of the tender is entirely within the purview of the executive and courts hardly have any role to play in this process except for striking down such action of the executive as is proved to be arbitrary or unreasonable. If the Government acts in conformity with certain healthy standards and norms such as awarding of contracts by inviting tenders, in those circumstances, the interference by Courts is very limited;
(c) In the matter of formulating conditions of a tender document and awarding a contract, greater latitude is required to be conceded to the State authorities unless the action of tendering authority is found to be malicious and a misuse of its statutory powers, interference by Courts is not warranted;
(d) Certain preconditions or qualifications for tenders have to be laid down to ensure that the contractor has the capacity and the resources to successfully execute the work; and
(e) If the State or its instrumentalities act reasonably, fairly and in public interest in awarding contract, here again, interference by Court is very restrictive since no person can claim fundamental right to carry on business with the Government.
24. Therefore, a Court before interfering in tender or contractual matters, in exercise of power of judicial review, should pose to itself the following questions:
(i) Whether the process adopted or decision made by the authority is mala fide or intended to favour someone; or whether the process adopted or decision made is so arbitrary and irrational that the court can say: "the decision is such that no responsible authority acting reasonably and in accordance with relevant law could have reached"; and (ii) Whether the public interest is affected. If the answers to the above questions are in negative, then there should be no interference under Article 226."Page 38 of 60 Downloaded on : Sun Jun 14 13:54:36 IST 2020
C/SCA/23050/2019 JUDGMENT "35. As observed earlier, the Court would not normally interfere with the policy decision and in matters challenging the award of contract by the State or public authorities. In view of the above, the appellant has failed to establish that the same was contrary to public interest and beyond the pale of discrimination or unreasonable.
We are satisfied that to have the best of the equipment for the vehicles, which ply on road carrying passengers, the 2nd respondent thought it fit that the criteria for applying for tender for procuring tyres should be at a high standard and thought it fit that only those manufacturers who satisfy the eligibility criteria should be permitted to participate in the tender. As noted in various decisions, the Government and their undertakings must have a free hand in setting terms of the tender and only if it is arbitrary, discriminatory, mala fide or actuated by bias, the Courts would interfere. The Courts cannot interfere with the terms of the tender prescribed by the Government because it feels that some other terms in the tender would have been fair, wiser or logical. In the case on hand, we have already noted that taking into account various aspects including the safety of the passengers and public interest, the CMG consisting of experienced persons, revised the tender conditions. We are satisfied that the said Committee had discussed the subject in detail and for specifying these two conditions regarding pre-qualification criteria and the evaluation criteria. On perusal of all the materials, we are satisfied that the impugned conditions do not, in any way, could be classified as arbitrary, discriminatory or mala fide."
6.25 It was submitted that paragraph 23(c) of the above decision, narrows down the scope of interference with tender conditions. It was submitted that for the purpose of intervention by the court, tender conditions should have been maliciously introduced and there should be no misuse of statutory powers, which is not so in the present case, and, therefore, the petitioner is not entitled to invoke the writ jurisdiction of this court. It was submitted that there is no Page 39 of 60 Downloaded on : Sun Jun 14 13:54:36 IST 2020 C/SCA/23050/2019 JUDGMENT arbitrariness in the action of the second respondent and hence, no ground for sustaining the challenge to the tender condition exists.
6.26 Reference was made to an unreported decision of this court in M/s. Shelat Brothers v. State of Gujarat, rendered on 20.6.2018 in Special Civil Application No.8095 of 2018, wherein as per the tender document one of the conditions of eligibility as per clause B(4)(c) was that the manufacturer should have valid WHO-GMP Certificate or valid Certificate of Pharmaceutical Product for individual product in WHO format. As per the said condition, no offer would be acceptable unless the tender was accompanied by requisite WHO-GMP Certificate as described therein. The court held that the justification given by the respondent No.3 therein to provide the eligibility criteria contained in Clause B(4)(c) of the tender document can be said to be in the larger public interest and there did not seem to be any mala fide intention in providing such eligibility criteria. The court noted that the items for which the tenders/ bids were invited were with respect to procurement of drugs, pharmaceuticals, surgical items and medical equipments for the Government Hospitals and Medical Institutions in the State and mainly, common people were the beneficiaries. The court also noted that as the respondent No.3 was a Nodal Agency for procurement of the aforesaid items, it was entitled to determine the criteria and insist that the pharmaceutical products/ items procured by them meet with the most stringent conditions and see to it that the pharmaceutical products procured are of the best quality so as to ensure the complete well being of the patients. The court, accordingly, Page 40 of 60 Downloaded on : Sun Jun 14 13:54:36 IST 2020 C/SCA/23050/2019 JUDGMENT held that such eligibility criteria cannot be said to be irrational and/or arbitrary and/or illegal.
6.27 Reliance was also placed upon the decision of the Allahabad High Court in the case of Dr. Jain Video on Wheels Ltd. v. State of U.P., rendered on 21.5.2014 in Writ
- C No.68462 of 2013 wherein the court expressed the view that the requirement of disclosing as to whether a criminal case was pending, was not extraneous to the basic purpose and object of the project. The court was of the view that the State is entitled to prescribe such a norm of eligibility so as to ensure that the bidding process is not tainted and found that there was nothing arbitrary or improper in the action of the State in excluding such a bidder from the fray of contesting parties.
6.28 Reliance was also placed upon the decision of the Jharkhand High Court in the case of Chhatisgarh Distilleries Ltd. v. State of Jharkhand, rendered on 17.12.2014 in W.P. (C) No.5056 of 2014, wherein the court held thus:-
"3. A counter-affidavit has been filed on behalf of the respondent-State of Jharkhand questioning bonafide of the petitioner in filing the writ petition challenging Clause 15(xix) of NIT, after participating in the tender process. It is stated that the writ petition has been filed with malafide intention to disrupt the process for grant of exclusive privilege to the successful tenderers. The duration of the license for supplying country liquor is 3½ years and therefore, if a tenderer against whom a criminal case is pending, is permitted to participate in the tender and if the tenderer is convicted by the Court during the tender period, a situation may arise which would ultimately hamper revenue of the State. The vacuum thus created would encourage illicit manufacture of country liquor Page 41 of 60 Downloaded on : Sun Jun 14 13:54:36 IST 2020 C/SCA/23050/2019 JUDGMENT which ultimately would be detrimental to the health of the people. The condition under Clause 15(xix) of NIT is well thought out condition which was incorporated in NIT in the interest of revenue. It is stated that in M/s K.D. Liquor and Fertilizer Pvt. Ltd (L.P.A No. 309/2011 and batch cases), it has been held that the Board of Revenue has jurisdiction to prescribe tender conditions and the terms and conditions fixed by the Board of Revenue cannot be challenged. It is further stated that Rule 53 contained in Notification dated 15.01.1919 is not applicable for grant of exclusive privilege rather, it is applicable only for retail shops. Before NIT was issued, the Department took approval of each condition in NIT from the Department of Law and Finance Department. A 5 Member Tender Committee constituting the Secretary-cum-Excise Commissioner and members from Vigilance Department, Commercial Taxes Department and Finance Department, scrutinized the bids of ten companies which participated in the tender process. The proceeding of the tender committee is freezed in videography. It was found that the bids of 3 tenderers including the petitioner-company was not in terms of NIT and finally only 5 candidates were declared successful in the technical bid and accordingly, a list of eligible and ineligible candidates was issued on 11.09.2014. The petitioner's application has been rejected by the Tender Committee on the ground that it has not submitted affidavit in terms of NIT conditions. A C.B.I. case of bank forgery is pending against the petitioner-company and this fact was concealed in the affidavit filed by it. The provisions of the Bihar Excise Act, 1915 (as adopted by the State of Jharkhand) make it abundantly clear that no one can sell liquor except, under the authority and subject to the terms and conditions of license granted under the Act. The petitioner has not disclosed the reason why it did not submit its affidavit on specified points. None of the conditions of NIT is ultra vires the Act or the provisions of the Constitution. It is not in contravention of any statutory provision nor the conditions in NIT were incorporated in bad faith. It is stated that dealing in intoxicant is not trade or business within the meaning of Article 19(1)(g) of the Constitution of India. The restrictions which are not permissible with other trades are lawful and reasonable so far as, the liquor trade is concerned. The State possesses the right of complete Page 42 of 60 Downloaded on : Sun Jun 14 13:54:36 IST 2020 C/SCA/23050/2019 JUDGMENT control over all aspects of manufacture, collection, sale, consumption etc. of intoxicants. Business in liquor is not a fundamental right of a citizen. It is the exclusive right of Government. It is asserted that the candidature of the petitioner-company has been rejected by the Tender Committee for sufficient reasons."
6.29 It was submitted that, therefore, condition B-10 stands the test of scrutiny under articles 14 and 19(1)(g) of the Constitution of India. It was submitted that the petitioner has no fundamental right to carry on business with the Government despite its criminal antecedents and therefore, condition B-10 is intra vires the provisions of the Constitution. It was accordingly, urged that the petition being devoid of merits deserves to be dismissed.
6.30 Dealing with the decisions on which reliance has been placed by the learned counsel for the petitioners; Mr. Shelat submitted Manoj Narula (supra) was rendered in the context of the Representation of People Act, where statutory rights have been conferred. Hence this decision will not be applicable to a case where the State invites bids, inasmuch as for the purpose of awarding contract, antecedents of bidders are relevant, and non-consideration thereof would be arbitrary. Insofar as the decision of the Supreme Court in ICOMM Tele Ltd. (supra) is concerned, it was submitted that the issue involved was in the facts of that case and has no relevance insofar as the present case is concerned. As regards the decision of this court in Special Civil Application No.4748 of 2017, it was submitted that the tender contained an unguided clause which refers to any criminal proceedings and has nothing to do with the tender process and hence, the said decision also does not carry the case of the petitioners any Page 43 of 60 Downloaded on : Sun Jun 14 13:54:36 IST 2020 C/SCA/23050/2019 JUDGMENT further. It was accordingly, urged that none of the decisions on which reliance has been placed on behalf of the petitioners, in any manner, assist their case.
7. In rejoinder, Mr. P.K. Jani, learned counsel for the petitioners submitted that the tender of the petitioner- company has been rejected on two grounds, namely, that the petitioner-company has filed a false affidavit and that there is a breach of condition B-10 of the eligibility criteria. It was submitted that the question that arise for consideration is, whether clause (14) of Annexure-IV to the tender document requires the petitioner-company to file details of any criminal case in the affidavit in the prescribed format. It was submitted that a reading of clause (14) of Annexure-IV indicates that nothing beyond the details provided therein are required to be submitted. It was submitted that if any details with regard to any criminal proceeding instituted by any other Government are required to be submitted, it has to be specifically provided that the tenderer will furnish information in that regard; whereas no such condition has been placed. It was submitted that the second respondent GMSCL has erred in not providing the format in a proper manner as it has not put any condition seeking such details.
7.1 On merits, it was submitted that the petitioner - company cannot be made to suffer on the ground that it has not disclosed pendency of criminal case when there is no such condition which requires it to disclose the same. It was submitted that the second ground on which the petitioner- company's tender has been rejected is also not satisfied as there is no declaration of spurious or adulterated quality and Page 44 of 60 Downloaded on : Sun Jun 14 13:54:36 IST 2020 C/SCA/23050/2019 JUDGMENT hence, condition B-10 is not attracted in the facts of the present case as one of the two conditions which are required to be fulfilled for invoking the said condition is not satisfied. Therefore, there was no requirement for the petitioner - company to disclose the same. It was submitted that thus, none of the conditions of the tender documents have been violated by the petitioners.
7.2 Referring to the decisions on which reliance has been placed by the learned counsel for the respondent, the learned counsel contended that the said decisions are not attracted in the facts of the present case inasmuch as the facts of none of the cases relied upon by the learned counsel for the respondent, match with the facts of this case. It was submitted that the said decisions have been rendered in different sets of facts which are nowhere near the facts of the present case, which stands on its own. It was submitted that the petitioners have, therefore, made out a case for grant of the relief as prayed for in the petition.
8. What is subject-matter of challenge in the present petition is the scrutiny report dated 19.12.2019, to the extent the same rejects the tender of the petitioner-company for the following reasons: "Your firm has not disclosed details in Annexure-IV about pending criminal case before the court of chief judicial magistrate, Virudhunagar dist: srivilliputtur, (Tamilnadu) hence, for submitting wrong/false affidavit (Annexure-IV) and as per tender condition No.10, bid is rejected."
9. In the light of the above scrutiny report, two questions Page 45 of 60 Downloaded on : Sun Jun 14 13:54:36 IST 2020 C/SCA/23050/2019 JUDGMENT arise for consideration:-
(i) Whether there was any non-disclosure on the part of the petitioner-company as contemplated in the tender conditions, so as to entail disqualification?
(ii) Whether condition B-10 of the tender document could have been invoked in the facts of the present case?
10. Insofar as the first question is concerned, it is the case of the second respondent that every bidder is required to submit on oath a declaration in terms of Annexure-IV to the tender documents, whereby the bidder has to inter alia declare on oath that "there is no court matter filed by State Government and its Board Corporation, is pending against our company". That during the course of scrutiny of the bid documents, it came to the notice of the second respondent that Criminal Case No.419 of 2014, wherein the petitioner-company is arrayed as accused No.11 is pending before the Court of the Chief Judicial Magistrate, Virudhunagar, District Srivilliputtur, (Tamilnadu). That the second respondent received a scrutiny report inter alia stating the reasons recorded in paragraph 8 hereinabove, for rejection of the petitioner - company's tender.
11. Thus, while it is the case of the second respondent that by failing to submit the information regarding the pending criminal proceedings, the petitioner - company has not complied with the tender conditions, more particularly, Condition 14 of Annexure-IV to the tender document, it is the case of the petitioners that the terms and conditions of the tender document, and more particularly, the disclosures Page 46 of 60 Downloaded on : Sun Jun 14 13:54:36 IST 2020 C/SCA/23050/2019 JUDGMENT required in Annexure-IV have been complied with inasmuch as, Condition 14 of Annexure-IV only requires disclosure of pendency of court matter initiated by the State Government or its Board Corporation, and not otherwise, and therefore, the rejection of the petitioner - company's bid on this ground is misconceived on facts and law.
12. In this regard, a perusal of the tender document shows that Serial No.D thereof contains the "General Terms and Conditions of Tender". Clause 4 thereof bears the heading "Technical Supporting Documents for Tenders" and provides that the legible and certified copies of the documents enumerated thereunder must be attached/annexed to Technical Supporting Documents. The document required to be attached in terms of sub-clause (i) thereof is "Affidavit regarding format of certificates. (As per format Annexure-IV)". Annexure-IV is the format of affidavit, and to the extent the same is relevant for the present purpose, reads thus:
"4. It is clearly and distinctly understood by me that the tender is liable to be rejected if on scrutiny at any time, any of the required Certificates/ Permissions/ Documents/Permits/Affidavits is/are found to be invalid/wrong/ incorrect/misleading/ fabricated /expired or having any defect.
7. My/Our firm has not been banned / debarred black listed at least for three years (excluding the current financial year) by any Government Department / State Government / Government of India / Board/ Corporation / Government Financial Institution "Not fail in any supply of Page 47 of 60 Downloaded on : Sun Jun 14 13:54:36 IST 2020 C/SCA/23050/2019 JUDGMENT Quality drugs and also not debarred/blacklisted during the tender period for the non-supply of quality drugs"
procedure through tender.
14. My/Our company has not filed any Writ Petition, Court matter and there is no court matter filed by State Government and its Board Corporation, is pending against our company."
13. In the light of the clauses contained in the format of affidavit as provided at Annexure-IV, the question that arises for consideration is whether the same contemplate disclosure of pendency of any criminal proceeding filed by some other State Government and its Board or Corporation.
14. Clause 14 of Annexure-IV requires the tenderer to inter alia state that there is no court matter filed by State Government and its Board or Corporation is pending against their company. Thus, what clause 14 requires is disclosure of any court matter filed by State Government and its Board Corporation, which is pending against the company. The clause, therefore, contemplates disclosure of criminal proceedings filed only by the State Government which would mean the respondent No.1 State of Gujarat and its Board Corporation. In the opinion of this court, there in nothing in the clause to read into it an intention that the bidder should disclose pendency of any criminal proceeding filed by any other State Government or its Board Corporation. This is all the more clear on a reading of clause 7 of Annexure-IV, wherein a statement has to be made that the firm has not been banned/ debarred/ black-listed at least for three years (excluding the Page 48 of 60 Downloaded on : Sun Jun 14 13:54:36 IST 2020 C/SCA/23050/2019 JUDGMENT current financial year) by any Government Department /State Government / Government of India / Board/ Corporation/ Government Financial Institution. Thus, where the respondents wanted the bidder to disclose that he has not been banned/ debarred/black-listed by any Government Department/State Government, it has specifically provided so by prefixing the words "Government Department/State Government" with the word "any", which is not so in case of clause 14, which merely says State Government which would mean the State of Gujarat. Under the circumstances, it is not possible to state that by not disclosing the pendency of a criminal case in another State filed by an authority other than the State Government or its Board Corporation, the petitioner - company has failed to make disclosure as required under clause 14 of Annexure IV to the tender document.
15. The Supreme Court, in Silppi Constructions Contractors (supra) has held that the authority which floats the contract or tender, and has authored the tender documents is the best judge as to how the documents have to be interpreted. If two interpretations are possible then the interpretation of the author must be accepted. The courts will only interfere to prevent arbitrariness, irrationality, bias, mala fides or perversity. Thus, if two interpretations are possible on reading the tender conditions, the interpretation of the author must be accepted. However, in the facts of the present case, on a reading of clause 14 of Annexure-IV, it is not possible to read into it a condition for disclosing pendency of criminal proceedings filed by any other State or its Board Corporation as is sought to be suggested on behalf of the second respondent. When the clause restricts such disclosure to court Page 49 of 60 Downloaded on : Sun Jun 14 13:54:36 IST 2020 C/SCA/23050/2019 JUDGMENT matter filed by State Government and its Board Corporation, the ambit of the clause cannot be extended to include all criminal proceedings filed by any other State Government or its Board Corporation. In the opinion of this court, from the plain language of the clause, it is not possible to accept the interpretation put forth by the second respondent. Therefore, the first condition for rejection of the petitioner - company's tender viz. that the firm had submitted wrong/false affidavit by not disclosing details in Annexure-IV about pending criminal cases before the court of the chief judicial Magistrate Virudhunagar District Sriviliputtur (Tamilnadu), does not appear to be satisfied. The respondents are, therefore, not justified on rejecting the petitioner's bid on this ground.
16. The next ground for rejecting the petitioner - company's bid is under tender condition B-10, which reads as under:
"B. ELIGIBILITY CRITERIA
10. If concern/firm/company whose product has been declared as of spurious or adulterated quality and any criminal case is filed and pending in any court shall not be eligible to participate for that particular product, in the Bid. Similarly convicted firm/company shall also not be eligible to participate in the Bid.
17. Thus, condition B-10 provides that a concern/firm/company shall not be eligible to participate in the bid for a particular product, if (i) such product has been declared as of spurious or adulterated quality; and (ii) any criminal case has been filed and is pending in any court. (iii) If the firm/company has been convicted. Since this case relates Page 50 of 60 Downloaded on : Sun Jun 14 13:54:36 IST 2020 C/SCA/23050/2019 JUDGMENT to pendency of criminal proceeding, the third ground which relates to conviction is not relevant for the present purpose.
18. From the language employed in condition B-10, it is clear that the intention of the author was to hold that a concern/firm/company is not eligible to participate in the bid for a particular product, provided both the conditions provided therein are satisfied viz. (i) such product has been declared as of spurious or adulterated quality; and (ii) any criminal case has been filed and pending in any court. Both are twin conditions and must co-exist for the purpose of invoking condition B-10. As a necessary corollary, therefore, it follows that if either of the two conditions is not satisfied, it would not be permissible to invoke condition B-10 of the eligibility criteria. It would, therefore, be necessary to examine whether the conditions precedent for holding that the petitioner - company is not eligible to participate in the bid in terms of condition B-10 are satisfied in this case.
19. On behalf of the petitioners, it has been contended that the criminal case relates only to the item at serial No.1 of the tender notice, namely, absorbent gauze with ISI mark, whereas the petitioner - company has bid for three items. Therefore, assuming for the sake of argument that the requirements for invoking condition B-10 are satisfied, even then the petitioner - company could have been held ineligible to bid only for item No.1 and not for all the three items.
20. The other contention raised is that on facts, the condition of the product being declared as of spurious or adulterated quality is not satisfied as there is no such declaration by any Page 51 of 60 Downloaded on : Sun Jun 14 13:54:36 IST 2020 C/SCA/23050/2019 JUDGMENT competent authority. Reliance has been placed upon the decision of the Supreme Court in B.S.N. Joshi & Sons Ltd. v. Nair Coal Services Ltd., (supra) wherein the court has held that the expression "declaration" has a definite connotation. It is a statement of material facts and may constitute a formal announcement or a deliberate statement. A declaration must be announced solemnly or official and must be made with a view "to make known" or to "announce".
21. In this regard, it may be pertinent to refer to the criminal complaint filed against the petitioner - company in the Court of the learned Chief Judicial Magistrate, Srivilluputhur, wherein the complainant is the Drug Inspector and the petitioner - company through the second petitioner, is arraigned as accused No.11. The complaint has been filed for the contravention of section 18(A)(i) read with section 17B(e) of the Drugs and Cosmetics Act, 1940 and section 18A and 18B of the Drugs and Cosmetics Act, 1940 (hereinafter referred to as "the Act").
22. On reading the complaint, it appears that it has been found that the allegation against the petitioner - company is that it has manufactured, procured, distributed and sold the "Absorbent Gauze Sch FII" in the guise of Handloom Cotton Gauze Absorbent ISI (Non-Sterilised) from M/s. Guru Textiles, Chatrapatti (T.N.) and M/s. Shri Muthumaari Textile, Chatrapatti (T.N.) which was actually manufactured on behalf of them at the Licensed Manufacturer M/s. Sri Sakthivel Murugan Taxtiles situated at 245A/4,Rajapalayam Road, Chatrapatti (T.N.) which is deemed to be "spurious" and punishable under section 27(c) of the said Act and also section Page 52 of 60 Downloaded on : Sun Jun 14 13:54:36 IST 2020 C/SCA/23050/2019 JUDGMENT 18B of the Act for not having furnished the particulars of the subject drug, punishable under section 28A of the said Act. Thus, it appears that the complaint has been lodged on the ground that the product is deemed to be spurious, and such complaint is pending adjudication. There is an allegation that the product is deemed to be spurious on the ground that it was not manufactured by the petitioner but got manufactured through another manufacturer. However, there does not appear to be any declaration by any competent authority that the product in question is spurious.
23. The expression "spurious drugs" has been defined under section 9-B of the Act, and reads as under:
"9-B. Spurious drugs.-For the purposes of this Chapter, a drug shall be deemed to be spurious-
(a) if it is imported under a name which belongs to another drug; or
(b) if it is an imitation of, or is a substitute for, another drug or resembles another drug in a manner likely to deceive or bears upon it or upon its label or container the name of another drug unless it is plainly and conspicuously marked so as to reveal its true character and its lack of identity with such other drug; or
(c) if the label or container bears the name of an individual or company purporting to be the manufacturer of the drug, which individual or company is fictitious or does not exist; or
(d) if it has been substituted wholly or in part by another drug or substance; or
(e) if it purports to be the product of a manufacturer of whom it is not truly a product."Page 53 of 60 Downloaded on : Sun Jun 14 13:54:36 IST 2020
C/SCA/23050/2019 JUDGMENT
24. Section 18 of Act provides for prohibition of manufacture and sale of certain drugs and cosmetics, and to the extent the same is relevant for the present purpose reads as under:-
"18. Prohibition of manufacture and sale of certain drugs and cosmetics.-From such date as may be fixed by the State Government by notification in the Official Gazette in this behalf, no person shall himself or by any other person on this behalf -
(a) manufacture for sale or for distribution, or sell, or stock or exhibit or offer for sale, or distribute -
(i) any drug which is not of a standard quality, or is misbranded, adulterated or spurious;
25. Thus, section 18(a) of the Act prohibits the manufacture or sale of any drug which is spurious. Under section 9B of the said Act, a drug is inter alia deemed to be spurious if it purports to be the product of a manufacturer of whom it is not truly a product. However, in the facts of the present case, it is not yet established that the drug in question (absorbent gauze) purports to be the product of a manufacturer of whom it is not truly a product; there is only an allegation to that effect. Thus, as on date, there is no declaration that the product in question purports to be the product of a manufacturer of whom it is not truly a product.
26. In the opinion of this court, there can be a declaration of that a drug is of spurious or adulterated quality either upon culmination of the court proceedings by way of a judgment, or by a competent authority like the Government Analyst to whom a sample of any drug has been submitted under section 25 of the Act for test or analysis and he declares such product to be of spurious or adulterated quality in his report under sub- section (1) of section 25, which is conclusive evidence unless Page 54 of 60 Downloaded on : Sun Jun 14 13:54:36 IST 2020 C/SCA/23050/2019 JUDGMENT the person notifies in writing his intention to adduce evidence in controversion of the report; or if the sample has been tested and analysed by the Central Drugs Laboratory and a report in writing signed by, or under the authority, of the Director of the Central Drugs Laboratory has been submitted declaring such product to be of spurious or adulterated quality, which is conclusive evidence of the facts stated therein.
27. In the facts of the present case, as noted hereinabove, there is no declaration that the product in question viz. absorbent gauze is of spurious or adulterated quality, and hence, only one of the conditions precedent for invoking condition B-10 of the eligibility conditions, namely pendency of a criminal proceeding in respect of such product is satisfied. Therefore, one of the twin conditions which are required to be conjointly satisfied for the purpose of invoking condition B-10 of the tender conditions is not satisfied. Consequently, the petitioner - company could not have been held to be ineligible by invoking condition B-10 of the tender conditions.
28. On behalf of the respondents, reliance has been placed upon the decision of the Supreme Court in Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corpn. Ltd., (supra), for the proposition that the owner or the employer of a project, having authored the tender documents, is the best person to understand and appreciate its requirements and interpret its documents. The constitutional courts must defer to this understanding and appreciation of the tender documents, unless there is mala fide or perversity in the understanding or appreciation or in the application of the terms of the tender conditions. It is possible that the owner or Page 55 of 60 Downloaded on : Sun Jun 14 13:54:36 IST 2020 C/SCA/23050/2019 JUDGMENT the employer of a project may give an interpretation to the tender documents that is not acceptable to the constitutional courts but that by itself is not a reason for interfering with the interpretation given. In the facts of that case, the Supreme Court held that although there did not appear to be any ambiguity or doubt about the interpretation given by NMRCL to the tender conditions, it was of the view that even if there was such an ambiguity or doubt, the High Court ought to have refrained from giving its own interpretation unless it had come to a clear conclusion that the interpretation given by NMRCL was perverse or mala fide or intended to favour one or the other bidder. In Silppi Constructions Contractors (supra), the Supreme Court has taken a similar view.
29. While there can be no quarrel with the above proposition of law, namely, that the employer of the project, having authored the tender documents is the best person to understand and appreciate its requirements and interpret its documents, such proposition would be applicable provided the view adopted by the employer is a plausible view. However, if the interpretation made by the employer is not discernible on a plain reading of the condition, the bidder cannot be called upon to interpret and understand the condition in the manner the employer has interpreted it. The above decisions, therefore, do not carry the case of the respondents any further.
30. Strong reliance has been placed on behalf of the second respondent on the decision of the Orissa High Court in AFR Jagruti Welfare Organisation (supra). However, in the facts of the said case, condition 4.3(d) inter alia provided that if any Page 56 of 60 Downloaded on : Sun Jun 14 13:54:36 IST 2020 C/SCA/23050/2019 JUDGMENT criminal cases are pending against the bidder or member at the time of submitting the bid, then the bid shall be summarily rejected. The condition further provided that the bidder shall submit an affidavit in negation of the above. Thus, the conditions contained in the tender documents cast an obligation to disclose pendency of any criminal case, which is not the case insofar as the facts of the present case are concerned. Under the circumstances, the said decision would have no applicability to the facts of the present case.
31. The decision of the Supreme Court in Charles K. Skaria v. C. Mathew (Dr), (supra) would also not be applicable to the facts of the present case for the reason that in the facts of the said case, there was a condition in the prospectus, directing that certificates shall be produced along with the applications for admission. The purpose obviously was to have instant proof of the qualification. The Supreme Court held that a method of convenience for proving possession of a qualification is merely directory. Moreover, the prospectus itself permitted the government to modify the method. In this view, the court found nothing objectionable with the government directive to the selection committee, nor in the communication to the selection committee by the university, nor even in their taking into consideration and giving credit for diplomas although the authentic copies of the diplomas were not attached to the application for admission. The court observed that a hundred examples of absurd consequences can be given if the substance of the matter was to be sacrificed for mere form and prescriptions regarding procedures. Thus, the above case was one where a condition was relaxed as such condition had been inserted only as a Page 57 of 60 Downloaded on : Sun Jun 14 13:54:36 IST 2020 C/SCA/23050/2019 JUDGMENT method of convenience; whereas in the present case, without there being a condition for making any disclosure, the petitioner - company has been disqualified on such ground.
32. As noted hereinabove, on a plain reading of the condition B-10 contained in the eligibility criteria provided in the tender document, it requires the two conditions precedent to be satisfied for the purpose of holding a person to be ineligible under the said clause; out of which one of the conditions, namely that there has to be a declaration that the product is of spurious or adulterated quality is not satisfied. Insofar as clause 14 of Annexure-IV to the tender document is concerned, the bidder is required to state that he/their company has not filed any writ petition, court matter and there is no court matter filed by State Government and its Board Corporation, is pending against their company. The object of the clause appears to be to ascertain as to whether any cases inter se are pending between the bidder and the State Government or its Boards or Corporations. The condition does not in any manner suggest that the bidder is required to disclose pendency of any criminal proceedings filed by any other State Government or its Board or Corporation. Under the circumstances, in the absence of any such specific provision being made in clear and uncertain terms, no fault can be found with the petitioner - company in not disclosing the factum of the criminal complaint pending in a court in Tamil Nadu. In absence of any obligation to disclose such fact, the petitioner - company cannot be disqualified on the ground of suppression of material facts or misrepresentation.
33. The petitioners have also challenged condition B-10 as Page 58 of 60 Downloaded on : Sun Jun 14 13:54:36 IST 2020 C/SCA/23050/2019 JUDGMENT being violative of the fundamental rights guaranteed under articles 14, 19(1)(g) and 21 of the Constitution of India and claim that, therefore, the same is non-operative and not binding to the petitioners. Since this court, on facts, has already held that condition B-10 could not have been invoked against the petitioner - company, it is not necessary to enter into the larger controversy, namely the challenge to the validity of such condition.
34. In the light of the above discussion, the petition succeeds and is, accordingly, allowed. The impugned decision contained in the scrutiny report dated 19.12.2019 in respect of Tender Notice No.GMSCL/D-09/2019-2020, Tender Enquiry No. GMSCL/D-658/RC/2019-20 (Annexure-A to the petition) rejecting the petitioners' tender is hereby quashed and set aside and the respondents are directed to consider the price- bid of the petitioners. Rule is made absolute accordingly, with no order as to costs.
35. Before parting, it may be noted that on reading the tender document in its entirety, it is found that it is very loosely drafted and its conditions are not clear and unambiguous and the language used is also grammatically incorrect. When the tender bid contains an eligibility criterion like condition B-10, it goes without saying that there should be a corresponding obligation requiring the bidder to disclose such fact; however, the tender document does not specifically provide for such disclosure, giving rise to unnecessary litigation like the present one. It is high time that the respondents closely scrutinise the tender documents and correct the inconsistencies contained therein so as to ensure Page 59 of 60 Downloaded on : Sun Jun 14 13:54:36 IST 2020 C/SCA/23050/2019 JUDGMENT that controversies like the present one are obviated in future.
(HARSHA DEVANI, J) (SANGEETA K. VISHEN, J) Z.G. SHAIKH Page 60 of 60 Downloaded on : Sun Jun 14 13:54:36 IST 2020