Himachal Pradesh High Court
Surender Kumar Gupta & Others vs H.P. State Forest Development on 14 July, 2016
Author: Sandeep Sharma
Bench: Mansoor Ahmad Mir, Sandeep Sharma
IN THE HIGH COURT OF HIMACHAL PRADESH
SHIMLA
CWP No.823 of 2016
.
Judgment Reserved on: 30.06.2016
Date of decision: 14 .07.2016
Surender Kumar Gupta & Others ...Petitioners
Versus
H.P. State Forest Development ...Respondents
Corporation & Others.
of
Coram
The Hon'ble Mr.Justice Mansoor Ahmad Mir, Chief Justice.
The Hon'ble Mr.Justice Sandeep Sharma, Judge.
rt
Whether approved for reporting ?1 Yes.
For the Petitioners: Mr.I.D. Bali, Senior Advocate with
Ms.Prarthana Khachi, Advocate.
For Respondents: Mr.Pranay Pratap Singh, Advocate.
Sandeep Sharma,J.
By way of present writ petition under Article 226 of the Constitution of India, the petitioners invoked extra ordinary jurisdiction of this Court and have prayed for following relief(s):-
"(a) That the condition no.9 in Annexure P-
1 and condition-34 in Annexure P-2 may be set aside and condition-34 of Annexure P-3 may be restored and be substituted in place of condition no.9 of Annexure P-1 and condition no.34 of Annexure P-2.
1Whether the reporters of Local Papers may be allowed to see the judgement? Yes.
::: Downloaded on - 15/04/2017 20:49:04 :::HCHP 2(b) That the condition no.9 and no.34 of Annexure P-1 and P-2 be held contrary to the decision of the Board conveyed vide Annexure P-4.
.
(c) That the instructions issued by the Board may be strictly applied for the finalization of tenders.
(d) Any other appropriate writ order or direction which this Hon'ble Court may deem fit, just and proper in the facts and circumstances of the of present case may kindly be issued/passed in the interest of justice and fair play."
2. rt Key facts, as emerged from the record, necessary for the adjudication of the case are that the petitioners are `A-
Class' Labour Supply Mates (for short `LSM') registered with the H.P. State Forest Development Corporation (for short `Corporation') and have been doing the work of unloading, sorting, stacking and re-stacking of timber at the Sale Depots of the Corporation at Baddi and Mantaruwala (Paonta Sahib), pursuant to various advertisements issued by the respondent-Corporation from time to time.
3. Respondent-Corporation has been established by the H.P. State Forest Corporation Act for marketing/selling of timber converted from trees, from Government and Private forests in Himachal Pradesh and other forest produce and in this regard they have their ::: Downloaded on - 15/04/2017 20:49:04 :::HCHP 3 Sale Depots at Baddi in District Solan and Mantruwala (Paonta Sahib) in District Sirmaur.
.
4. The timber from the forest is transported to these Sale Depots for further marketing/selling to general public and the timber brought to these Sale Depots in trucks, requires to be unloaded and thereafter sorted, of stacked and re-stacked. The respondent-Corporation, with a view to regulate the aforesaid work of un-loading, sorting, stacking and re-stacking, invites tenders from rt LSM for the aforesaid purposes to ensure that the work is allotted to person capable of doing the same.
5. The Divisional Managers of the Sale Depots of the Corporation at Baddi and Mantruwala (Paonta Sahib) invited tenders for the financial year 2016-17 (Annexures P-1 & P-2). The terms and conditions for tenders regarding loading, unloading, sorting, stacking and re-
stacking of the Government/Private forest during the aforesaid financial year are as under:-
"Approximate estimated volume of the work at Baddi is 30000m3 and for that contractor was to pay Rs.1,02,000/- on account of earnest money in the office of Divisional Manager, Forest Depot, Badi."::: Downloaded on - 15/04/2017 20:49:04 :::HCHP 4
Terms and conditions further state that:-
"If the variation between the schedule rates and lowest tender rates is up to (-) 20%, then the security amount will be recovered @ 10% of .
the contract value as determined by the schedule of rates and for variation beyond (-) 20% of the schedule of rates security amount will be recovered @ 15% of the contract value of schedule of rates."
Terms and conditions further provide that:-
"If the variation between schedule rate and of tender rate is more than (-) 30% the tender will be straightway rejected." It further provides that "the amount of EMD will be adjusted towards security amount payable by the successful bidder. The lowest tenderer/bidder rt shall have to deposit the security amount as calculated above at the time of acceptance of tender/bid failing which earnest money will be forfeited."
6. Similarly, vide Annexure P-2, petitioners have placed on record terms and conditions for the tender issued by the Divisional Manager, Forest Depot at Mantruwala (Paonta Sahib) for the financial year 2016-17.
Careful perusal of the terms and conditions as well as tender notice clearly suggests that it is identical to the tender notice/terms and conditions issued by the Divisional Manager, Forest Depot at Baddi for the financial year 2016-17 which has been discussed above.
::: Downloaded on - 15/04/2017 20:49:04 :::HCHP 57. It appears that the petitioners are aggrieved by the conditions stipulated in clause-9 of Annexure P-1 and .
clause-34 of Annexure P-2.
8. Clause-9 of Terms and Conditions contained in tender regarding unloading, sorting, stacking and restacking of timber Government and Private in Himkasth of Sale Depot at Baddi, for the financial year 2016-17 (Annexure P-1) provide as under:-
rt "9. If the rates are found within the limit and there is tie of the rates among the lowest tenderers then the tender will be finalized by negotiation among the lowest tenderers and if negotiation is not possible in that event the tenders shall be finalized Authorised Authority keeping in view the capabilities/abilities of LSM's who can execute said work successfully."
9. Similarly, clause-34 of Terms and Condition for tenders for unloading, sorting & stacking of timber (Govt. & Private) in Himkasth Sale Depot Mantruwala Paonta Sahib for the year 2016-17 (Annexure P-2) provide as under:
"34. If the rates are found within the limit and there is tie of the rates amongst the lowest tenderers then the tender will be finalized by negotiation amongst lowest tenderers and negotiation is not possible in that event the tenders shall be finalized by Authorised Authority keeping in view the capabilities/abilities of LSM's who can execute said works successfully."::: Downloaded on - 15/04/2017 20:49:04 :::HCHP 6
10. Conditions No.9 and 34, as contained in .
Annexures P-1 & P-2, suggest that if it is found, after opening of the tender bid furnished by the respective parties, that there is a tie of rates amongst the lowest tenderers, then both the tenderers would be called for of negotiation and even then if negotiation is not possible, in that eventuality Authority would be empowered to finalize the tender keeping in view the capability/ability of LSM, rt who can execute and work successfully.
11. Petitioners being aggrieved with the incorporation of aforesaid conditions No.9 and 34 stipulated in Annexures P-1 and P-2 respectively approached this Court by way of present petition and have prayed that these conditions may be quashed and set aside and in their place condition No.34, contained in Annexure P-3, may be made applicable. Condition No.34 contained in Annexure P-3 is reproduced hereinbelow:-
"34. If the rates are found within the limit and there is tie of the rates among the lowest tenderers then the tender will be finalized by negotiation among the lowest tenderers and if negotiation is not possible in that event the tenders shall be finalized by way of draw of lots amongst the lowest tenderers."::: Downloaded on - 15/04/2017 20:49:04 :::HCHP 7
12. Perusal of Annexure P-3 suggests that it is a document containing terms and conditions for tender .
regarding unloading, sorting, stacking and restacking of timber Government and Private during the financial year 2015-16, wherein condition No.34 provides that in the event of tie of rates amongst the lowest tenderers, tender of would be finalized by negotiations amongst the lowest tenderers and in the event of non-agreement in negotiation, if any, tender would be finalized by way of rt draw of lots amongst the lowest tenderers.
13. Petitioners have also prayed that conditions No.9 and 34, contained in Annexures P-1 and P-2, may be held contrary to the decision of the Board of Directors (for short `BOD') conveyed vide Annexure P-4.
Communication dated 1.1.2005 (Annexure P-4) issued by Corporation is with regard to execution of works through tender/auction. Careful perusal of this document suggests that vide this communication respondents have conveyed the decision of the BOD from time to time containing guidelines for sanction of work or tender/auction, which provides as under:-
::: Downloaded on - 15/04/2017 20:49:04 :::HCHP 8"Memo This office has conveyed the decision of the Board of Directors taken from time to time containing guidelines for sanction of .
work on tender/auction. The aforesaid decisions in so far as rejection of tenders/ bids where the rate received are beyond (-)20% of the upset price are reproduced below:-
.... .... .... .... .... .... .... .... .... .... ....
.... .... .... .... .... .... .... .... .... .... ....
When one of the aggrieved tenderer filed a writ petition No.180/2000 the legal advisor of Corporation brought this ambiguity to the of notice of this office and asked this office to modify this condition. Subsequently, after analyzing the entire position in consultation with the Legal Advisor of the Corporation, the following directions are issued to decide the rt lowest tenders/bids in case of tie of rates by two or more tenderers/bidders at (-) 0% or upto (-) 30% of the upset price, as the bid more than 30% below the upset price is to be straightway rejected:-
"If the tender rates are found within the limit and there is tie of the rates among the lowest tenderers, then the tender will be finalized by negotiation among the lowest tenderers and if negotiation is not possible, in that event the tenderers shall be finalized by way of draw of lots amongst the lowest tenderers."
14. Perusal of aforesaid conditions contained in letter dated 1.1.2005 (Annexure P-4) suggests that if tender rates are found within the limit and there is tie of the rates among the lowest tenderers, then the tender would be finalized by negotiation among the lowest tenderers and in the event of failure of negotiations, tender would be finalized by way of draw of lots amongst the lowest tenderers.
::: Downloaded on - 15/04/2017 20:49:04 :::HCHP 915. In the instant case, petitioners have prayed that conditions contained in Annexures P-1 & P-2 be .
quashed and set aside and condition No.34 contained in Annexure P-3 and decision taken vide letter dated 1.1.2005 (Annexure P-4) may be restored. Petitioners have stated that action of the respondent-Corporation in of doing away with the practice to decide the tender by way of draw of lots has caused great prejudice to the petitioners as well as similarly situate persons because rt decision contained in letter dated 1.1.2005 (Annexure P-4) was fair and acceptable to all the petitioners as well as similarly situate persons and there was no possibility, if any, of any arbitrariness or colourable exercise of powers by the respondents-Corporation. Whereas, conditions No.9 and 34, contained in Annexures P-1 and P-2, have given un-fettered powers to the respondent-Corporation to reject the lowest tender without assigning any reason and as such same deserves to be quashed and set aside.
16. It is also contended that conditions No.9 and 34, contained in Annexures P-1 and P-2, give arbitrary powers to the respondents to choose any tenderer ::: Downloaded on - 15/04/2017 20:49:04 :::HCHP 10 illegally, which is completely against the doctrine of fairness and smacks of extraneous reasons.
.
17. Respondents, by way of detailed reply, refuted the claim set up in the writ petition by the petitioners. It is stated on behalf of the respondents that every tender process which is set in motion by the State or its of instrumentalities should undoubtedly be transparent, fair and open and accordingly every terms and conditions have been made known to the bidders who intend to rt participate in tendering process, pursuant to the advertisement issued in the newspaper. It is also stated that bidders participating in the tender process have no other right except the right to equality and fair treatment in the matter of evaluation of competitive bids offered by interested persons in response to notice inviting tenders.
Respondents-Corporation in their reply categorically stated that the tender condition under challenge was changed, keeping in view the fact that the same rates were being quoted by a large number of bidders and as such, Corporation solely, with a view to cope up with this unhealthy practice, issued certain guidelines where all the bidders who were tied at a particular bid amount would ::: Downloaded on - 15/04/2017 20:49:04 :::HCHP 11 furnish the list of the employees and their E.P.F. numbers so as to curb certain unhealthy practices, i.e. the .
unhealthy practice of bidding being done by proxy bidders. It is the prerogative of the respondent-
Corporation to incorporate terms and conditions in the tender notice and same cannot be challenged, save and of except, it is demonstrated that the same are against the basic principles of law. Respondents, while refuting the claim of the petitioners, stated as under:-
rt "12. That the contents of Para 12 of the present writ petition are admitted to the extent that the proper procedure was laid down for the abovementioned tender bid. It is also pertinent to mention here that the present petitioner have not challenged the tender process as such. Thereby clearly reflecting that the petitioners have admitted to the fact that the tender process was done in a transparent, fair and open manner. It is further submitted that as per the terms and conditions of the tender if the variation between schedule of rates and tender rates is more than (-) 30%, the tender will be rejected. A copy of the abovementioned terms and conditions is being appended along with as Annexure R-2.
13. That the contents of the para 13 of the present writ petition are wrong and hence denied. As per terms and conditions for the tender issued by the Divisional Manager, H.S.D., Baddi for the financial year 2016-17 it has been categorically stated in the condition No.9 in the case of the tender for H.S.D. Baddi and conditions No.34 in case of H.S.D. Mantaruwala, that in case of a tie between the bidders the tender shall be decided by the authorized authority keeping in view the capability/ability of the L.S.M. who can execute the said work successfully.
The contents of the above-mentioned condition is being reproduced as below for the ready reference of this Hon'ble Court:-
::: Downloaded on - 15/04/2017 20:49:04 :::HCHP 12"If the rates are found within the limit and there is tie of the rates among the lowest tenderers then the tender will be finalized by negotiation among the lowest tenderers and if negotiation is not possible in that event the .
tenders shall be finalized by Authorized
Authority keeping in view the
capabilities/abilities of LSM's who can execute said work successfully."
It is further brought to the notice of this Hon'ble Court that in order to curb the unhealthy practice of proxy bidders certain guidelines were issued with regard to the verification of the ability of of the bidder based on the information sought in the communication as has already been mentioned in para supra. It is further submitted that 12 Labour Supply Mates participated in tender process and 11 labour supply mates quoted the same rate for rt unloading, sorting and stacking of timber etc. for the financial year 2016-17 at H.S.D., Mantaruwala, which includes petitioner No.1 to 5 and 7. Similarly, in case of HSD, Baddi 10 bidders quoted rates for abovementioned works out of which 7 bidders quoted the same rate. This also includes the petitioner No.1 and 2 and petitioner No.4 to 7. The rates offered by the abovementioned bidder were exactly same. i.e. (-) 30% below the sanctioned schedule of rates. Annexure R-3 (Colly)."
18. It has been specifically submitted by the respondents that conditions, laid down in the tender notices for the year 2016-17, are in the interest of Corporation and the same have been incorporated to award the works to the best among the lowest bidders depending on the capability of the bidders and as such there is no merits, whatsoever, in the petition and same deserves to be rejected at a threshold. It is also mentioned in the reply that it has been observed in the ::: Downloaded on - 15/04/2017 20:49:04 :::HCHP 13 past that the LSM have been quoting the same rates i.e. lowest rate upto (-) 30% below the sanctioned schedule of .
rates which seems to have become a practice and to break this un-healthy trend on the part of the LSM, conditions No.9 and 34 were laid down in the tender notices for Baddi and Mantruwala respectively. Respondents have of also stated that another conditions which were incorporated in the tender notified for the year 2016-17 i.e. the condition No.35 of HSD, Baddi and Condition rt No.37 HSD Mandruwala, wherein the LSM, who have been successful in tender for unloading, sorting and stacking of timber, were barred from participation in the monthly auction of the timber in Depot, which has not been challenged by the present petitioners.
19. Mr.I.D. Bali, learned Senior Counsel representing the petitioners, vehemently argued that the conditions contained at Sr.Nos.9 and 34 of Annexures P-1 and P-2 are not sustainable as same would give a handle to the respondent-Corporation to reject the tender of any lowest bidder without there being any reason. He also contended that there was no reason, whatsoever, with the respondent-Corporation to do away with the past practice, ::: Downloaded on - 15/04/2017 20:49:04 :::HCHP 14 where in the eventuality of tie of rates, tender used to be given on the basis of draw of lots. Mr.Bali, while making .
his submissions on behalf of the petitioners made this Court to travel through Annexure P-4, which is the communication dated 1.1.2005 i.e. decision of the BODs taken from time to time. Perusal of this document of suggests that certain guidelines have been issued to the respective Depots for sanction of work on tender/auction.
Mr.Bali, specifically invited the attention of this Court to rt the concluding part of the aforesaid letter which provides that in the event of difference of rates amongst the lowest tenderers, there would be the draw of lots amongst lowest tenderers. Mr.Bali forcefully contended that if conditions No.9 and 34 are allowed to sustain, there is further possibility of its gross mis-use by the Authorities, who for extraneous reasons may accept or reject the tender of any eligible or in-eligible persons without verifying his potential and credential.
20. Mr.Pranay Pratap Singh, learned counsel representing the respondents, vehemently opposed the averments contained in the writ petition as well as submissions having been made by Mr.I.D. Bali, learned ::: Downloaded on - 15/04/2017 20:49:04 :::HCHP 15 Senior Counsel on the ground that the present writ petition is not maintainable at all because no injustice, .
whatsoever, has been caused to the petitioner by action of the respondent-Corporation. Mr.Singh, while advancing his arguments, informed the Court that petitioners had participated in the tender process in terms of Annexures of P-1 and P-2 and after failing to get the work in competitive bidding have approached this Court on very flimsy ground and as such present petition deserves to be quashed and rt set aside.
21. Mr.Pranay Partap Singh, during arguments having been made by him, invited the attention of this Court to Annexure R-1 filed alongwith reply filed by the Corporation to suggest that decision under challenge has been taken by the respondent-Corporation in order to stop unhealthy practice of quoting the same rates by LSM. He further stated that Corporation issued certain guidelines because in certain cases, the bidders were found furnishing the list of same and similar employees/labour and as such to curb this unhealthy practice of LSM, decision has been taken that in case of tie amongst the lowest bidders, tender would be awarded ::: Downloaded on - 15/04/2017 20:49:04 :::HCHP 16 by the Authority to a person capable of doing the work in terms of tender. Mr.Singh, while concluding his .
arguments, invited the attention of this Court to the pronouncements given by this Court as well as Hon'ble Apex Court to demonstrate that it is the domain of the Department to provide terms and conditions in the tender of notice and no contractor, if any, can claim any work as a matter of right. He prayed that, in view of the aforesaid decision taken by the respondent-Corporation in public rt interest, present petition filed by the petitioners deserves to be dismissed.
22. Before adverting to the merits and demerits of this case, we have no hesitation to conclude that the present petition is not maintainable at all solely on the ground that the petitioners have approached this Court after participating in the tender process pursuant to Annexures P-1 and P-2. Once they participated in tender proceedings, they have no right, whatsoever, to challenge any terms and condition contained in the tender notice.
They have only come to the Court when they failed to procure the work in question in terms of tender notice issued by the respondents-Corporation. Had they got ::: Downloaded on - 15/04/2017 20:49:04 :::HCHP 17 work in terms of tender notices, which are subject matter of this Court, they would have never approached this .
Court by way of present writ petition challenging therein the conditions as are being done in the present case.
Otherwise also it is the complete domain of the department to prescribe conditions in the tender notice of and in this regard contractor cannot dictate terms in any manners. Respondent-Department is always well within its rights to put stringent conditions in the tender inviting rt notice to ensure that quality contractors participate in bidding process so that quality work is done pursuant to the notice inviting tender. If Court is satisfied that any condition, put in tender notice, is in public interest or has been solely put with a view to save public exchequer, it is always outside the purview of the Court to interfere in the same.
23. Hon'ble Apex Court, while dealing with the tender matters, has repeatedly held that the Courts have very very limited powers while examining the issues with regard to terms and conditions of tender notice.
::: Downloaded on - 15/04/2017 20:49:04 :::HCHP 1824. In this regard reliance is placed on Tata Cellular vs. Union of India, (1994)6 SCC 651, wherein .
the Court held:
"70. It cannot be denied that the principles of judicial review would apply to the exercise of contractual powers by Government bodies in order to prevent arbitrariness or favoritism. However, it must be clearly stated that there are inherent limitations in exercise of that of power of judicial review. Government is the guardian of the finances of the State. It is expected to protect the financial interest of the State. The right to refuse the lowest or any other tender is always available to the Government. But, the principles laid down in rt Article 14 of the Constitution have to be kept in view while accepting or refusing a tender. There can be no question of infringement of Article 14 if the Government tries to get the best person or the best quotation. The right to choose cannot be considered to be an arbitrary power. Of course, if the said power is exercised for any collateral purpose the exercise of that power will be struck down.
71. Judicial quest in administrative matters has been to find the right balance between the administrative discretion to decide matters whether contractual or political in nature or issues of social policy; thus they are not essentially justifiable and the need to remedy any unfairness. Such an unfairness is set right by judicial review.
77. The duty of the court is to confine itself to the question of legality. Its concern should be :
1. Whether a decision-making authority exceeded its powers?
2. Committed an error of law,
3. committed a breach of the rules of natural justice, ::: Downloaded on - 15/04/2017 20:49:04 :::HCHP 19
4. reached a decision which no reasonable tribunal would have reached or,
5. abused its powers.
.
Therefore, it is not for the court to determine whether a particular policy or particular decision taken in the fulfillment of that policy is fair. It is only concerned with the manner in which those decisions have been taken. The extent of the duty to act fairly will vary from case to case. Shortly put, the grounds upon which an administrative action is subject to control by judicial review can be classified as under:
of
(i) Illegality : This means the decision-
maker must understand correctly the law that regulates his decision-making power and must give effect to it.
rt (ii) Irrationality, namely, unreasonableness.
Wednesbury
(iii) Procedural impropriety.
The above are only the broad grounds but it does not rule out addition of further grounds in course of time. As a matter of fact, in R. v.
Secretary of State for the Home Department, ex Brind, (1991)1 AC 696, Lord Diplock refers specifically to one development, namely, the possible recognition of the principle of proportionality. In all these cases the test to be adopted is that the court should, "consider whether something has gone wrong of a nature and degree which requires its intervention".
(pp.675 & 677-678)
25. Similarly, the action of the State in the contractual matters is required to be tested on touchstone of Article 14 of the Constitution of India. But if the action of the State in the contractual matters are meant for public good and in public interest and are expected to be ::: Downloaded on - 15/04/2017 20:49:04 :::HCHP 20 fair and just, no interference whatsoever of the Courts is called for. If the decision of the State is informed by the .
reason and same is in public interest, Courts have no occasion, whatsoever, to interfere in the same.
26. In this regard reliance is placed on the judgment of this Court in Raj Kumar vs. State of of Himachal Pradesh and Others, 2014(2) Him.L.R.(DB) 1217, wherein this Court held as under:
"9. The action of the State even in contractual rt fields will have to be tested on the following touchstone:
(i) The State action in the contractual field are meant for public good and in public interest and are expected to be fair and just.
(ii) It would be alien to the constitutional
scheme to accept the argument of
exclusion of Article 14 of the
Constitution of India in contractual matters.
(iii) The fact that a dispute falls in the domain of contractual obligation, would make no difference to a challenge raised under Article 14 of the Constitution of India on the ground that the impugned act is arbitrary, unfair and unreasonable.
(iv) Every State action must be informed of reason and it follows that an act uninformed by reason is arbitrary.
(v) Where no plausible reason or principle is indicated (or is discernible), and where the impugned action ex facie appears to be arbitrary, the onus shifts on the State to justify its action as fair and reasonable.::: Downloaded on - 15/04/2017 20:49:04 :::HCHP 21
(vi) Every holder of public office is accountable to the people in whom the sovereignty vests. All powers vested in a public office, even in the field of contract, are meant to be exercised for .
public good and for promoting public interest.
(vii) Article 14 of the Constitution of India applies also to matters of governmental policy even in contractual matters, and if the policy or any action of the Government fails to satisfy the test of reasonableness, the same would be unconstitutional.
of (See: Shrilekha Vidyarthi vs. State of U.P. (1991) 1 SCC 212).
rt Thus, what is essential is that the State and its instrumentalities and their functionaries while exercising their executive power in matters of trade or business etc. including making of contracts, should bear in mind the public interest, public purpose and public good. This is so, because every holder of public office by virtue of which he acts on behalf of the State, or its instrumentalities, is ultimately accountable to the people in whom sovereignty vests and as such, all powers vested in the State are meant to be exercised for public good and in public interest. Therefore, the question of unfettered discretion in an executive authority just does not arise. The fetters on discretion are clear, transparent and objective criteria or procedure which promotes public interest, public purpose and public good. A public authority is ordained, therefore to act, reasonably and in good faith and upon lawful and relevant grounds of public interest. (Refer: Reliance Natural Resources Ltd. vs. Reliance Industries Ltd. (2010) 7 SCC 1). Bearing in mind the guiding principles laid down in the Constitution of India alongwith law laid down by the Hon'ble Supreme Court from time to time, we proceed to determine the writ petition."
(pp.1219-1220) ::: Downloaded on - 15/04/2017 20:49:04 :::HCHP 22
27. In this regard reliance is also placed on the judgments of the Hon'ble Supreme Court as well as of this .
Court in S.G.Jaisinghani vs. Union of India and Others, AIR 1967 SC 1427, Satwant Singh Sawhney vs. D.Ramarathnam, Assistant Passport Officer, New Delhi and Others, AIR 1967 SC 1836, Namit Gupta vs. of State of H.P. and Others, AIR 2014 HP 49, Pritam Singh vs. State of Himachal Pradesh, (2013)1 Him.L.R. 130 and Saroj Garg vs. State of H.P. & Ors., rt AIR 2011 HP 94.
28. Now, adverting to the merits of the case, this Court does not see any merits in the contention put forth by the petitioners. Careful perusal of conditions No.9 and 34, contained in Annexures P-1 and P-2, suggests that in the event of tie of rates, lowest bidder would be called for by the authority for negotiation and, if even despite negotiation no lowest bidder succeed, in that eventuality authority would be with the Corporation to allot work to a person actually capable of doing the same.
29. This Court, after perusing the detailed reply filed by the respondents, sees no illegality in the aforesaid conditions, contained in Annexures P-1 and P-2. It has ::: Downloaded on - 15/04/2017 20:49:04 :::HCHP 23 specifically come in the reply of the respondents that conditions No.9 and 34, contained in Annexures P-1 and .
P-2, have only been incorporated with a view to curb the unhealthy practice of bidding being done by the proxy bidders. It also finds mention in the reply that 12 LSM participated in tender process and 11 LSM quoted the of same rate for unloading, sorting and stacking of timber for the financial year 2016-17 at HSD, Mantaruwala, which included petitioners No.1 to 5 and 7 also. Similarly rt in case of HSD, Baddi, 7 out of 10 bidders quoted same rates for abovementioned works, which included petitioners No.1, 2 and 4 to 7. The rates offered by the abovementioned bidders were exactly same i.e. (-) 30% below the sanctioned schedule of rates. It clearly emerges from the reply of the respondents that decision, if any, taken by the respondent-Corporation, is to avoid monopoly/collusion of the tenderers so that there is a healthy competition amongst the contractors and maximum revenue of the State is protected. Respondents categorically stated in the reply that the aforesaid decision has been taken in the public interest. Moreover, none of the petitioners is actually aggrieved with the action, if ::: Downloaded on - 15/04/2017 20:49:04 :::HCHP 24 any, taken pursuant to conditions No.9 and 34 contained in Annexures P-1 and P-2, rather, they all have been .
unsuccessful bidders, who have approached this Court after failing to get work in terms of tender notice. Since none of the petitioners is actually aggrieved with conditions No.9 and 34, contained in Annexure P-1 and P-
of 2, this Court is unable to accept the contention put forth on behalf of the petitioners that if these conditions are allowed to sustain, it would give unfettered powers to the rt respondents to reject or accept the tender of anybody.
Had the petitioners being lowest bidders in terms of tender notice issued by the respondents and their tenders were rejected by the respondents invoking clauses 9 and 34, as referred above, this Court would have examined the correctness, if any, of the aforesaid provisions introduced in Annexures P-1 and P-2 by the respondent-Corporation.
But once it stands proved on record that the petitioners participated in tender process and when they failed to become the lowest tenderers they approached this Court, this Court is really finding it difficult to accept any contention put forth by them with regard to ::: Downloaded on - 15/04/2017 20:49:04 :::HCHP 25 legality/illegality of the clauses 9 and 34 of the terms and conditions contained in Annexures P-1 and P-2.
.
30. Apart from above, it is the domain of the Department to incorporate terms and conditions while inviting the tender notices and contractor, if any, has no right, whatsoever, to challenge the terms and conditions of contained in the tender notice, save and except, if the same are shown to be against the basic principles of law.
31. In rt this regard reliance is placed upon Maharashtra State Board of Secondary and Higher Secondary Education and Another vs. Paritosh Bhupeshkumar Sheth and Others and Alpana V.Mehta vs. Maharashtra State Board of Secondary Education and Another, (1984)4 SCC 27, wherein the Hon'ble Supreme Court held:
"16. In our opinion, the aforesaid approach made by the High Court is wholly incorrect and fallacious. The Court cannot sit in judgment over the wisdom of the policy evolved by the Legislature and the subordinate regulation-making body. It may be a wise policy which will fully effectuate the purpose of the enactment or it may be lacking in effectiveness and hence calling for revision and improvement. But any drawbacks in the policy incorporated in a rule or regulation will not render it ultra vires and the Court cannot strike it down on the ground that, in its opinion, it is not a wise or prudent policy, but is even a foolish one, and that it will not really serve to effectuate the purposes of the Act. The ::: Downloaded on - 15/04/2017 20:49:04 :::HCHP 26 Legislature and its delegate are the sole repositories of the power to decide what policy should be pursued in relation to matters covered by the Act and there is no scope for interference by the Court unless the .
particular provision impugned before it can be said to suffer from any legal infirmity, in the sense of its being wholly beyond the scope of the regulation-making power or its being inconsistent with any of the provisions of the parent enactment or in violation of any of the limitations imposed by the Constitution. None of these vitiating factors are shown to exist in the present case and hence there was no scope at all for the High of Court to invalidate the provision contained in clause (3) of Regulation 104 as ultra vires on the grounds of its being in excess of the regulation-making power conferred on the Board. Equally untenable, in our opinion, is rt the next and last ground by the High Court for striking down clause (3) of Regulation 104 as unreasonable, namely, that it is in the nature of a bye-law and is ultra vires on the ground of its being an unreasonable provision. It is clear from the scheme of the Act and more particularly, Sections 18, 19 and 34 that the Legislature has laid down in broad terms its policy to provide for the establishment of a State Board and Divisional Boards to regulate matters pertaining to secondary and higher secondary education in the State and it has authorised the State Government in the first instance and subsequently the Board to enunciate the details for carrying into effect the purposes of the Act by framing regulations. It is a common legislative practice that the Legislature may choose to lay down only the general policy and leave to its delegate to make detailed provisions for carrying into effect the said policy and effectuate the purposes of the Statute by framing rules/regulations which are in the nature of subordinate legislation. Section 3(39) of the Bombay General Clauses Act, 1904, which defines the expression 'rule' states: Rule shall mean a rule made in exercise of the power under any enactment and shall include any regulation made under a rule or under any enactment." It is important to notice that a distinct power of ::: Downloaded on - 15/04/2017 20:49:04 :::HCHP 27 making bye-laws has been conferred by the Act on the State Board under Section 38. The Legislature has thus maintained in the Statute in question a clear distinction between 'bye-laws' and 'regulations'. The bye-
.
laws to be framed under Section 38 are to relate only to procedural matters concerning the holding of meetings of State Board, Divisional Boards and the Committee, the quorum required, etc. More important matters affecting the rights of parties and laying down the manner in which the provisions of the Act are to be carried into effect have been reserved to be provided for by regulations made under Section 36. The of Legislature, while enacting Sections 36 and 38, must be assumed to have been fully aware of the niceties of the legal position governing the distinction between rules/regulations properly so called and bye- rt laws. When the statute contains a clear indication that the distinct regulation- making power conferred under Section 36 was not intended as a power merely to frame bye-laws, it is not open to the Court to ignore the same and treat the regulations made under Section 36 as mere bye-laws in order to bring them within the scope of justiciability by applying the test of reasonableness.
21. The legal position is now well- established that even a bye-law cannot be struck down by the Court on the ground of unreasonableness merely because the Court thinks that it goes further than "is necessary" or that it does not incorporate certain provisions which, in the opinion of the court, would have been fair and wholesome. The Court cannot say that a bye- law is unreasonable merely because the judges do not approve of it. Unless it can be said that a bye law is manifestly unjust, capricious, inequitable, or partial in its operation, it cannot be invalidated by the Court on the ground of unreasonableness. The responsible representative body entrusted with the power to make by laws must ordinarily be presumed to know what is necessary, reasonable, just and fair. In this connection we may usefully extract the following off-quoted observations of Lord ::: Downloaded on - 15/04/2017 20:49:04 :::HCHP 28 Russell of Killowen in Kruse v. Johnson, (1898) 2 QB 91, 98, 99 (quoted in Trustees of the Port of Madras v. Adminchand Pyarelal, (1976)! SCR 721, 733) (SCC p.178, para 23):
.
(1) "When the Court is called upon to consider the byelaws of public representative bodies clothed with the ample authority which I have described, accompanied by the checks and safeguards which I have mentioned, I think the consideration of such bye-laws ought to be approached from a different standpoint. They ought to be supported if possible. They ought of to be, as has been said, 'benevolently interpreted' and credit ought to be given to those who have to administer them that they will be reasonably administered."
rt"The learned Chief Justice said further that there may be cases in which it would be the duty of the court to condemn by-laws made under such authority as these were made (by a county council) as invalid because unreasonable. But unreasonable in what sense? If for instance, they were found to be partial and unequal in their operation as between different classes; if they were manifestly unjust; if they disclosed bad faith; if they involved such oppressive or gratuitous interference with the rights of those subject to them as could find no justification in the minds of reasonable men, the court might well say, 'Parliament never intended to give authority to make such rules; they are unreasonable and ultra vires.' But it is in this and this sense only, as I conceive, that the question of reasonableness or unreasonableness can properly be regarded. A bye-law is not unreasonable merely because particular judges may think that it goes further than is prudent or necessary or convenient or because it is not accompanied by an exception which some judges may think ought to be there'.
" We may also refer with advantage to the well-known decision of the Privy Council in Slattery v. Naylor, (1988) 13 AC 446, where it has been laid down that when considering whether a bye- law is reasonable or not, the Court would need a strong case to be made against it and would decline to determine whether it would have been wiser or more prudent to make the bye-::: Downloaded on - 15/04/2017 20:49:04 :::HCHP 29
law less absolute or will it hold the bye- law to be unreasonable because considerations which the court would itself have regarded in framing such a bye-law have been over looked or .
reflected by its framers. The principles laid down as aforesaid in Kruse v.
Johnson, (1898) 2 QB 91, 98, 99 and Stattery v. Naylor, (1988) 13 AC 446 have been cited with approval and applied by this Court in Trustees of the Port of Madras v. Aminchand Pyarelal & Ors.,(1976) 1 SCR 721, 733."
32. In Parisons Agrotech Private Limited and of Another vs. Union of India and Others, (2015)9 SCC 657, the Hon'ble Supreme Court held:
rt "14. No doubt, the writ court has adequate power of judicial review in respect of such decisions. However, once it is found that there is sufficient material for taking a particular policy decision, bringing it within the four corners of Article 14 of the Constitution, power of judicial review would not extend to determine the correctness of such a policy decision or to indulge into the exercise of finding out whether there could be more appropriate or better alternatives.
Once we find that parameters of Article 14 are satisfied; there was due application of mind in arriving at the decision which is backed by cogent material; the decision is not arbitrary or irrational and; it is taken in public interest, the Court has to respect such a decision of the Executive as the policy making is the domain of the Executive and the decision in question has passed the test of the judicial review.
::: Downloaded on - 15/04/2017 20:49:04 :::HCHP 3015. In Union of India v. Dinesh Engg. Corpn., (2001)8 SCC 491, this Court delineated the aforesaid principle of judicial .
review in the following manner: (SCC pp.498- 99, para 12) "12. .....There is no doubt that this Court has held in more than one case that where the decision of the authority is in regard to the policy matter, this Court will not ordinarily interfere since these policy matters are taken based on expert knowledge of the persons concerned and of courts are normally not equipped to question the correctness of a policy decision. But then this does not mean that the courts have to abdicate their right to scrutinize whether the policy in question is formulated keeping in mind all the rt relevant facts and the said policy can be held to be beyond the pale of discrimination or unreasonableness, bearing in mind the material on record. ..... Any decision be it a simple administrative decision or policy decision, if taken without considering the relevant facts, can only be termed as an arbitrary decision. If it is so, then be it a policy decision or otherwise, it will be violative of the mandate of Article 14 of the Constitution."
16. The power of the Court under writ jurisdiction has been discussed in Asif Hameed. v. State of J&K, 1989 Supp.(2) SCC 364: 1 SCEC 358 in paras 17 and 19, which read as under: (SCC pp. 373-74) "17. Before adverting to the controversy directly involved in these appeals we may have a fresh look on the inter se functioning of the three organs of democracy under our Constitution. Although the doctrine of separation of powers has not been recognised under the Constitution in its absolute rigidity but the Constitution makers have meticulously defined the functions of various organs of the State. Legislature, executive and judiciary have to function within their own ::: Downloaded on - 15/04/2017 20:49:04 :::HCHP 31 spheres demarcated under the Constitution. No organ can usurp the functions assigned to another. The Constitution trusts to the judgment of these organs to function and exercise their .
discretion by strictly following the procedure prescribed therein. The functioning of democracy depends upon the strength and independence of each of its organs. Legislature and executive, the two facets of people's will, they have all the powers including that of finance. Judiciary has no power over sword or the purse nonetheless it has power to ensure that the aforesaid two main organs of State function within the constitutional of limits. It is the sentinel of democracy. Judicial review is a powerful weapon to restrain unconstitutional exercise of power by the legislature and executive. The expanding horizon of judicial review has taken in its fold the concept of social and rt economic justice. While exercise of powers by the legislature and executive is subject to judicial restraint, the only check on our own exercise of power is the self-imposed discipline of judicial restraint.
* * *
19. When a State action is challenged, the function of the court is to examine the action in accordance with law and to determine whether the legislature or the executive has acted within the powers and functions assigned under the Constitution and if not, the court must strike down the action. While doing so the court must remain within its self-imposed limits. The court sits in judgment on the action of a coordinate branch of the government.
While exercising power of judicial review of administrative action, the court is not an appellate authority. The Constitution does not permit the court to direct or advise the executive in matters of policy or to sermonize qua any matter which under the Constitution lies within the sphere of legislature or executive, provided these authorities do not transgress their constitutional limits or statutory powers."
17. The aforesaid doctrine of separation of power and limited scope of judicial review in policy matters is reiterated in State of Orissa ::: Downloaded on - 15/04/2017 20:49:04 :::HCHP 32 v. Gopinath Dash, (2005) 13 SCC 495 : (SCC p.497, paras 5-7) "5. While exercising the power of judicial .
review of administrative action, the Court is not the Appellate Authority and the Constitution does not permit the Court to direct or advise the executive in the matter of policy or to sermonise qua any matter which under the Constitution lies within the sphere of the legislature or the executive, provided these authorities do not transgress their constitutional limits or statutory power. (See Asif Hameed v. State of J&K; 1989 of Supp (2) SCC 364 and Shri Sitaram Sugar Co. Ltd. v. Union of India; (1990) 3 SCC 223). The scope of judicial enquiry is confined to the question whether the decision taken by the Government is rtagainst any statutory provisions or it violates the fundamental rights of the citizens or is opposed to the provisions of the Constitution. Thus, the position is that even if the decision taken by the Government does not appear to be agreeable to the Court, it cannot interfere.
6. The correctness of the reasons which prompted the Government in decision- making taking one course of action instead of another is not a matter of concern in judicial review and the Court is not the appropriate forum for such investigation.
7. The policy decision must be left to the Government as it alone can adopt which policy should be adopted after considering all the points from different angles. In the matter of policy decisions or exercise of discretion by the Government so long as the infringement of fundamental right is not shown the courts will have no occasion to interfere and the Court will not and should not substitute its own judgment for the judgment of the executive in such matters. In assessing the propriety of a decision of the Government the Court cannot interfere even if a second view is possible from that of the Government."
::: Downloaded on - 15/04/2017 20:49:04 :::HCHP 3333. The Hon'ble Apex Court in Census Commissioner and Others vs. R.Krishnamurthy, .
(2015)2 SCC 796 held as under:
"23. The centripodal question that emanates for consideration is whether the High Court could have issued such a mandamus commanding the appellant to carry out a census in a particular manner.
24. The High Court has tried to inject the concept of social justice to fructify its of direction. It is evincible that the said direction has been issued without any deliberation and being oblivious of the principle that the courts on very rare occasion, in exercise of powers of judicial rt review, would interfere with a policy decision.
25. Interference with the policy decision and issue of a mandamus to frame a policy in a particular manner are absolutely different. The Act has conferred power on the Central Government to issue Notification regarding the manner in which the census has to be carried out and the Central Government has issued Notifications, and the competent authority has issued directions. It is not within the domain of the Court to legislate. The courts do interpret the law and in such interpretation certain creative process is involved. The courts have the jurisdiction to declare the law as unconstitutional. That too, where it is called for. The court may also fill up the gaps in certain spheres applying the doctrine of constitutional silence or abeyance. But, the courts are not to plunge into policy making by adding something to the policy by way of issuing a writ of mandamus. There the judicial restraint is called for remembering what we have stated in the beginning. The courts are required to understand the policy decisions framed by the Executive. If a policy decision or a Notification is arbitrary, it may invite the frown of Article 14 of the Constitution. But when the Notification was not under assail and the same is in ::: Downloaded on - 15/04/2017 20:49:04 :::HCHP 34 consonance with the Act, it is really unfathomable how the High Court could issue directions as to the manner in which a census would be carried out by adding certain aspects. It is, in fact, issuance of a .
direction for framing a policy in a specific manner.
26. In this context, we may refer to a three-Judge Bench decision in Suresh Seth V. Commr., Indore Municipal Corporation, (2005)13 SCC 287, wherein a prayer was made before this Court to issue directions for appropriate amendment in the M.P. of Municipal Corporation Act, 1956 so that a person may be debarred from simultaneously holding two elected offices, namely, that of a Member of the Legislative Assembly and also of a Mayor of a Municipal Corporation.
rt Repelling the said submission, the Court held: (SCC pp.288-89, para 5) "In our opinion, this is a matter of policy for the elected representatives of people to decide and no direction in this regard can be issued by the Court. That apart this Court cannot issue any direction to the legislature to make any particular kind of enactment. Under our constitutional scheme Parliament and Legislative Assemblies exercise sovereign power to enact laws and no outside power or authority can issue a direction to enact a particular piece of legislation. In Supreme Court Employees' Welfare Assn. v. Union of India, (1989)4 SCC 187 (SCC para 51) it has been held that no court can direct a legislature to enact a particular law. Similarly, when an executive authority exercises a legislative power by way of a subordinate legislation pursuant to the delegated authority of a legislature, such executive authority cannot be asked to enact a law which it has been empowered to do under the delegated legislative authority. This view has been reiterated in state of J & K v A.R. Zakki,1992 Supp(1) SCC 548. In A.K. Roy v. Union of India, (1982)1 SCC 271it was held that no mandamus can be issued to enforce an Act which has been passed by the legislature."
::: Downloaded on - 15/04/2017 20:49:04 :::HCHP 3534. Consequently in view of the detailed discussions made hereinabove, we do not see any reason .
to interfere in the tender notices, Annexures P-1 and P-2, issued by respondents-Corporation and to invoke extra ordinary jurisdiction as prayed for by the petitioners in the present petition. Accordingly, the writ petition is of dismissed.
35. Interim direction, if any, is vacated. All miscellaneous applications are disposed of.
rt
(Mansoor Ahmad Mir)
Chief Justice
July 14 , 2016 (Sandeep Sharma)
(aks) Judge
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