Jammu & Kashmir High Court - Srinagar Bench
Zahoor Ahmad Khan vs Ut Of J&K And Others on 1 November, 2022
Author: Sanjay Dhar
Bench: Sanjay Dhar
S. No.74
Suppl.List
HIGH COURT OF JAMMU & KASHMIR AND LADAKH
AT SRINAGAR
WP(C) No.2416/2022
Caveat No.2124/2022
Zahoor Ahmad Khan
.... Petitioner(s)
Through:Mr.Mir Manzoor, Advocate
V/s
UT of J&K and Others
..... Respondent(s)
Through: Mr.M.A.Chashoo, AAG
CORAM:
HON'BLE MR. JUSTICE SANJAY DHAR, JUDGE
ORDER
01.11.2022 Caveat No.2124/2022:
With the appearance of Mr. M.A.Chashoo, AAG the caveat stands discharged.
WP(C) No.2416/2022:
1. Heard learned counsel for the parties and perused the record.
2. The petitioner has filed the instant writ petition challenging Bid No.GEM/2022/B/2606555 Dated:04.10.2022, whereby tenders were invited for execution of contract for supply of 87-90 HP, 4WD-
Tractors with heated cabin as per the terms and conditions, technical specifications, commercial terms and conditions. It is submitted that condition No.7 incorporated in the tender document, which prescribes the eligibility criteria of the bidders, is tailor made to benefit a limited class of persons/companies. It has been submitted 2 WP(C) No.2416/2022 that the circulars issued by CVC provide that the prequalification criteria should neither be very stringent nor very lax to facilitate the entry of bidders. It has been further submitted that on an earlier occasion the respondents had invited bids vide GEM/2022/B/2115832 Dated 19.04.2022 for supply of same product with similar condition relating to eligibility criteria and the petitioner filed the writ petition bearing WP(C) No.968/2022 challenging the action of the respondents. According to the petitioner, an order came to be passed on 13.05.2022, whereby the respondents were directed to open the bids but they were directed not to finalize the contract by next date. The writ petition is stated to be still pending before this Court. It is contended that in order to circumvent the aforesaid order of the Court, the respondents cancelled the bid dated 19.04.2022 and issued fresh bid, which is under challenge in the instant writ petition.
3. According to the petitioner, the illegal action of the respondents has violated the fundamental right of the petitioner to participate in the bidding process and that action of the respondents is arbitrary and irrational. It is further contended that the respondents have acted in a mala fide manner in order to bestow favour upon their favorites.
4. Learned counsel for the petitioner has, during the course of arguments of the case, reiterated the contentions raised in the writ petition, whereas learned counsel for the respondents has submitted that the respondents were well within their powers to prescribe 3 WP(C) No.2416/2022 eligibility criteria for participation in the bidding process and that the Court cannot sit in appeal over the decisions of the respondents in this regard.
5. Before adverting to the merits of the rival contentions raised by the learned counsel for the parties, it would be necessary to have a look at condition No.7 of the tender documents, which is the bone of contention. It reads as under:-
"7. Bidder shall have to upload the documentary evidence of Annual production of OEM of tractors which shall not be less than 20,000 units per annum continuously for the last 3 years. The figures submitted by the bidder shall have to be corroborated by and verified with the sales figures indicated by Indian Tractor Industry."
6. According to the afore quoted condition, a bidder would become eligible to participate in the tendering process if his annual production of OEM of tractors is not less than 20,000 units per annum continuously for the last three years. It has been contended by learned counsel for the petitioner that such a stringent condition can be met only by a few suppliers in the whole country and it amounts to debarring the most of the prospective bidders, including the persons like the petitioner. This, according to the learned counsel for the petitioner, has been done by the respondents simply to favour their favorites.
7. So far as the scope of judicial interference in the matters relating to the conditions, particularly those relating to prescription of eligibility criteria in the tender documents is concerned, the Supreme 4 WP(C) No.2416/2022 Court has repeatedly evolved the principle that scope of judicial review is very limited and the same has to be exercised only to prevent arbitrariness or favoritism.
8. In Tata Cellular v. Union of India, (1994) 6 SCC 651, the Supreme Court held that there would be no infringement of Article 14 if the Government tried to get the best person or the best quotation, for the right to choose cannot be considered to an arbitrary power unless the power is exercised for any collateral purpose. The Court observed that the scope of judicial review is confined to only three aspects given as under:
"(i) Whether there was any illegality in the decision which would imply whether the decision making authority has understood correctly the law that regulates his decision making power and whether it has given effect to it;
(ii) Whether there was any irrationality in the decision taken by the authority implying thereby whether the decision is so outrageous in its defiance of logic or accepted moral standards that no sensible person who had applied his mind to the question to be decided could have arrived at the same; and
(iii) Whether there was any procedural impropriety committed by the decision making authority while arriving at the decision."
9. The Supreme Court went on to formulate the principles governing judicial review in the following words:
"(i) The modern trend points to judicial restraint in administrative action.
(ii) The court does not sit as a court of appeal but merely reviews the manner in which the decision was made.
(iii) 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.5 WP(C) No.2416/2022
(iv) 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.
(v) 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.
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.
(vi) Quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure."
10. In Galaxy Transport Agencies v. New J.K.Roadways, 2020 SCC Online SC 1035, the Supreme Court disapproved the interference by the High Court in the interpretation by the tender inviting authority of the eligibility term relating to the category of vehicles required to be held by the bidders, in the tender floated for supply of vehicles for the carriage of troops and equipment. After referring to the various decisions, the Supreme Court stated the following legal principles:
"14. In a series of judgments, this Court has held that the authority that authors the tender document is the best person to understand and appreciate its requirements, and thus, its interpretation should not be second-guessed by a court in judicial review proceedings. In Afcons Infrastructure Ltd. V. Nagpur Metro Rail Corporation Ltd., (2016) 16 SCC 818: (AIR 2016 SC 4305), this Court held:
"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 6 WP(C) No.2416/2022 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."
11. In Silppi Constructions Contractors v. Union of India, 2019 SCC Online SC 1133, the Supreme Court after considering its earlier judgments on the issue, held as under:
"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 realize 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. With this approach in mind we shall deal with the present case."
12. Relying upon the afore said judgment in the recent case of M/s Agmatel India Pvt. Ltd. V. M/s Resoursys Telecom, AIR 2022 SC 1103, the Supreme Court observed as under:
"17. The above mentioned statements of law make it amply clear that the author of the tender document is taken to be the best person to understand and appreciate its requirements; and if its interpretation is manifestly in consonance with the language of the tender document or sub-serving the purchase of the tender, the Court would prefer to keep restraint. Further to that, the technical evaluation or comparison by the Court is impermissible; and even if the interpretation given to the tender document by the person inviting offers is not as such acceptable to the Constitutional Court, that, by itself, would not be a reason for interfering with the interpretation given."7 WP(C) No.2416/2022
13. In the case of Simens Aktiengeselischaft and S.Ltd. v. DMRC Ltd. & Ors, 2011 SCC 288, the judgment relied upon by the learned counsel for the petitioner, the Supreme Court has again held that the Court has to constantly keep in mind that it does not sit in appeal over the soundness of the decision. The Court further stated that what can be examined by the Court is only as to whether the decision making process was fair, reasonable and transparent. It was further emphasized that the Courts ought to exercise judicial restraint where the decision is bona fide with no perceptible injury to public interest.
14. From the foregoing analysis of the legal position on the subject, it is clear that the owner of a project who has authored the tender document, is the best person who can interpret its documents. The authority which floats the tender is the best judge who can state as to how the documents have to be interpreted and what are its requirements. The Court cannot sit in appeal as an expert either to undertake interpretation of the terms of the tender documents or to sit in the judgment as to what should be the criteria of the eligibility. These are all matters within the domain of the authority issuing the tenders. The guidelines issued by the CVC are the only illustrative on the subject and even in these guidelines it has been provided that the organisations can suitably modify these guidelines for specialized jobs/works. So no hard and fast rules have been 8 WP(C) No.2416/2022 prescribed by the CVC so far as laying down of prequalification of criteria in the tender documents is concerned.
15. Coming to the facts of the instant case, the respondents are in need of 87-90 HP, 4WD-Tractors with heated cabin. The product for which the tenders have been floated, is of a specialized nature and the decision of the respondents to include the condition for the eligibility criteria that annual production of the bidders should be up to a particular minimum standard cannot be termed as arbitrary or irrational, simply because those falling below the aforesaid standard would get ousted from the bidding process by prescribing such a condition. This Court would not sit in appeal over the feasibility and desirability of such condition and substitute its own view as to what should be the annual production of tractors of a prospective bidder. This is the domain of the experts and not of the Courts.
16. The petitioner has not alleged any mala fides against the respondents nor it has been stated in the petition as to whom the respondents want to favour by incorporating the aforesaid condition of the eligibility. The contention of the learned counsel for the petitioner in this regard is, therefore, without any merit.
17. It has been next contended by learned counsel for the petitioner that the respondents have cancelled the earlier bid dated 19.04.2022 simply to defeat order of the Court dated 13.05.2022, passed in WP(C) No.968/2022, whereby the respondents were directed not to finalize the contract. The contention is without any merit for the 9 WP(C) No.2416/2022 reason that order dated 13.05.2022 bears reference to condition of the bid document which provides that for a bidder to be eligible to participate in the process, he should have supplied 100 units of the tractors per year to the Government or semi Government institution, which is alleged to be totally uncalled for and tailor made for the intended beneficiary. However, the said condition has been deleted by the respondents in the fresh tender which is subject matter in the instant writ petition. Therefore, respondents have in deference of the contentions recorded in order dated 13.05.2022, deleted the condition relating to supply of a particular number of tractors in the eligibility criteria. Thus, it cannot be stated that by cancelling the earlier tender notice and issuing the fresh one, the respondents have tried to circumvent the order passed by this Court.
18. For the foregoing reasons, I do not find any merit in the petition and the same is accordingly dismissed.
(SANJAY DHAR) JUDGE SRINAGAR 01.11.2022 Sarveeda Nissar Whether the order is speaking: Yes/No Whether the order is reportable: Yes/No