Orissa High Court
Uflex Limited vs State Of Orissa And Ors. on 12 October, 2007
Equivalent citations: 105(2008)CLT32, 2007(2)CTLJ463(ORI), AIR 2008 (NOC) 835 (ORI.)
Author: B.P. Das
Bench: B.P. Das, A.K. Samantaray
JUDGMENT B.P. Das, J.
1. By this Writ Petition, the Petitioner challenges the decision of the Govt. of Orissa in Excise Department rejecting its tender submitted for "Printing of Excise Adhesive Labels (EALs) and Supply of the same to Govt. of Orissa for affixing on the caps of IMFL and Beer bottles etc. as per specifications and terms and conditions mentioned in the Tender Document".
2. The Petitioner is a company incorporated under the Companies Act, 1956 and is engaged in manufacturing and supply of Security Holograms (Excise Adhesive Labels - 'EALs' in short) of various specifications with several security features and has a comprehensive in-house manufacturing facility to manufacture holograms with state-of-art technology. According to the Petitioner, it has the necessary infrastructure with requisite machineries and equipments to manufacture such security holograms and has the capability to supply Polyester Based Security Holograms (EALs) as per the specification and requirement of different Government authorities.
The Govt. of Orissa in Excise Department-O.P. No. 1 published a Notice Inviting Tender ('NIT' in short) dated 13.6.2007, vide Annexure-1, inviting sealed tenders from the Govt. or registered private parties having eligibility criteria for Printing of EALs and Supply of the same to Govt. of Orissa for affixing on the caps of IMFL, Beer bottles, etc. as per specifications and terms and conditions mentioned in the Tender Document. The Tender Document prescribed two-bid system - Technical Bid and Price Bid. Part I of the Tender Document prescribed that Technical Evaluation will be done by a committee termed as Technical Committee appointed for the purpose and after opening of the Technical Bids, the technical capability of the tenderers and other details furnished by tenderers shall be verified in a manner as deemed fit by the Technical Committee and the decision of the Tender-accepting Authority, i.e., the State Govt. in Excise Department, in this regard shall be final. Part 2 of the Tender Document provided for instructions to the tenderers, Part 3 prescribed Technical Specification and Product Specification and Part 4 contained General Terms and Conditions (Terms and Conditions for Technical Bid). The Tender Document prescribed that only successful tenderers, who would be qualified in the Technical Bid evaluation, would be considered for Price Bid opening and the tenderers, who would not be qualified in the Technical Bid, would not be considered for the Price Bid opening.
Pursuant to Annexure-1, the Petitioner purchased the Tender Document and submitted the tender within the stipulated time, i.e., before 28.7.2007. The Petitioner found that there were several anomalies with regard to the Technical Specification prescribed in Part 3 of the Tender Document, especially with regard to 2D/3D conventional system and DOT MATRIX digital origination system with 4000 DPI or more for which the Petitioner filed a representation on 25-6.2007 (vide Annexure-4) bringing the same to the notice of O.P. No. 1 and indicating therein that the Master Origination System as provided under the Technical Specification of the Tender Document was erroneous and misconceived inasmuch as such system is very old and obsolete and latest technology provided for comprehensive system of high resolution 12000 DPI combined system with 2D/3D system. According to the Petitioner, the system which the Petitioner was pleading for was in use with all the Hologram manufacturers of repute in the country and, therefore, insistence on conventional system under the Tender Document has no nexus with the object sought to be achieved. In the said representation dated 25.6.2007 the Petitioner also brought to the notice of O.P. No. 1 the guidelines issued by the Central Vigilance Commission of the Govt. of India laying down that the qualification or eligibility criteria, would be based entirely upon the capability and resources of prospective bidders to perform the particular contract.
The Petitioner has further stated that on coming to know that the State Govt. has constituted a Technical Committee for technical evaluation of the Bids submitted by different tenderers and in the said committee, one Dr. A.K. Agrawal of Chandigarh, who is a retired Professor in Physics, has been appointed as a member, the Petitioner submitted another representation on 27.8.2007 (vide Annexure-5) bringing therein to the notice of O.P. No. 1 that the said Dr. A.K. Agrawal is a consultant to O.P. No. 3-M/s. Holostik India Ltd. and expressed its apprehension that the opinion of said Dr. Agrawal would be biased and would go in favour of the competing tenderer, i.e., O.P. No. 3. Accordingly he should not be allowed to act as a member of the Technical Committee for evaluation of the Technical Bids of the tenderers, especially when O.P. No. 3 is also a bidder. The further case of the Petitioner is that in spite of the representation made with regard to the error in the terms and conditions of the Tender Document as well as the Technical Specification prescribed thereunder and also with regard to participation of Dr. A.K. Agrawal in the Technical Committee for evaluation of the Birds, the Petitioner apprehending that O.P. Nos. 1 and 2 ignoring such objection have possibly taken a decision to reject the Petitioner's tender, i.e., Technical Bid, has filed this Writ Petition with a prayer to quash the decision of the State Govt. in the Excise Department, O.P. No. 1, rejecting its Technical Bid and thereby not considering its Price Bid and proceeding to consider and accept the Tender and/or Price Bid of O.P. No. 3-M/s. Holostik India Ltd. The Petitioner has also sought for a declaration that the conditions with regard to 2D/3D conventional system as provided in the Technical Specification under Part 3 of the Tender Document has no relevance with the final product, i.e., EALs, to be supplied by the bidders.
On 17.9.2007 when this matter came up before this Court, Shri U.C. Patnaik and his associates entered appearance for O.P. No. 3 on the strength of a caveat petition and filed a memo engaging Shri Bibudhendra Mishra, Senior Advocate, to argue the case on behalf of O.P. No. 3. Adjourning the matter to 18.9.2007, this Court directed maintenance of status quo with regard to printing and supply of EALs in pursuance of the Notice Inviting Tender dated 13.6.2007,Annexure-1. On 18.9.2007copies of the Writ Petition were directed to be served on the Learned Counsel for the State, i.e., O.P. Nos. 1 and 2 and the Learned State Counsel was directed to obtain instruction and inform the Court the decision taken on the representation of the Petitioner submitted on 27.8.2007 and to produce the records relating to the tender in question. The records were ultimately produced before this Court on 20.9.2007 and the matter was heard on 24.9.2007 and 25.9.2007.
Learned Advocate General appeared on behalf of the State. A counter affidavit has been filed on behalf of the State Govt., O.P. No. 1, raising mainly the question of locus standi of the Petitioner to file the present Writ Petition on the ground that as the Petitioner has participated and being an unsuccessful tenderer cannot challenge the same in the present Writ Petition. Further stand taken in the counter affidavit is that no final, decision on the tender has been taken till date, and the recommendation of the Tender Committee has been placed before the Chief Minister, who is the minister in charge of the Excise Department, and therefore, there is no cause of action for the Petitioner to invoke the jurisdiction of this Court under Article 226 of the Constitution. It is further stated that since the Petitioner could not qualify in the technical bid evaluation, as it failed to fulfill the eligibility conditions prescribed in the tender document, the Technical Sub-Committee and the Tender Committee are justified in rejecting the Petitioner's tender and recommending to disqualify the technical bid of the Petitioner. According to O.P. No. 1, it is the successful bidders, who qualified in the technical evaluation,' their price bids were opened and the same were recommended for final decision. In the said counter affidavit it is further stated that the Govt. have constituted a Tender Committee under the Chairmanship of the Commissioner-cum-Secretary to Govt., Excise Department in which the representatives of other Departments such as Law, Finance, Directorate of Export Promotion and Marketing, Directorate of Printing, Stationery and Publication, Excise Commissioner, Excise Deputy Commissioner (CD), Cuttack are the members. The A.F.A.-cum-Under Secretary to Govt., Excise Department, has been appointed as Member-Secretary. The Tender Committee held its first meeting on 1.5.2007 and finalized the tender process. A Technical Sub-Committee under the chairmanship of the Excise Commissioner has been constituted with the Director (Technical), Qrissa Govt. Press, Asst. Director (Printing), Text Book Press, Bhubaneswar, Deputy Director (Quality Control), Bhubaneswar, and the Excise Deputy Commissioner (CD), Cuttack, as members and the Govt. approval has been taken to the constitution of such Technical Sub-Committee. Besides, the aforesaid members, two technical experts, one from Central Scientific Instruments Organisation, Chandigarh and another from the Department of Printing Technology, Jadavpur University, Kolkata, have been appointed as the members of the Technical Sub-Committee.
Petitioner's representation dated 25.6.2007 (Annexure-4) requesting to amend the tender document by reducing the experience criteria to two-years was considered and the Petitioner participated in the tender process on 28.7.2007 and the Technical Sub-Committee after a thorough scrutiny, discussion and clarification furnished by the representatives of the tenderers, found that the Petitioner has no 2D/3D conventional master origination and Dot Matrix master origination of 4000 DPI but it possessed Kenamex machine having both 2D/3D Dot Matrix feature as well as short of experience of 3 years on this technology. The Technical Sub-Committee expressed their views for testing of the samples of the Petitioner's firm in the laboratory in respect to the specifications of the tender documents. The Excise Commissioner, who is the Chairman of the Technical Sub-Committee, after contacting the Hologram Manufacturers Association of India, suggested the name of Dr. A.K. Agrawal, Emeritus Scientist, Central Scientific Instrumentation Organisation, Chandigarh for his expert opinion on the samples of all tenderers with reference to the tender documents and specifications and effects etc. including the samples of the Petitioner. According to O.P. No. 1, the decision to test samples in a laboratory was taken by the Technical Sub-Committee on 30.7.2007 and the fact that Dr. A.K. Agrawal was associated as an expert with conducting the laboratory testing was placed before the Technical Sub-Committee in their meeting on 21.8.2007 and was approved by the Technical Sub-Committee. According to O.P. No. 1, it is a fact that two members of the Technical Sub-Committee, i.e., representatives of CSIR, Candigarh, and Jadavpur University, Kolkata, were not given notice to attend the Technical Sub-Committee meeting on 21.8.2007. According to O.P. No. 1, this was perhaps by oversight, as these two outside members had not attended the meeting held on 30.7-.2007 in which technical bids were scrutinized and samples of all the tenderers including the Petitioner along with tender document were sent to Dr. A.K. Agrawal, the Emeritus Scientist of the C.S.I.R., Chandigarh, vide Excise Deptt. letter No. 4021 dated 3.8.2007, Annexure-G, and Dr. A.K. Agrawal, in his letter dated 14.8.2007 furnished his report of technical evaluation of the samples of all the tenderers including the Petitioner, vide Annexure-H. The sum and substance of the stand of O.P. No. 1 is that the rejection of the Petitioner's tender is legal and correct and there is no occasion for this Court to interfere with the process of tender.
3. From the above factual matrix, the following questions fall for determination of this Court:
(i) Whether the Petitioner has locus standi to file this Writ Petition after participating in the tender process?
(ii) Whether the Committee, which evaluated the technical bids of the Petitioner is the Technical Sub-Committee constituted by the State Govt. and whether there is any infirmity in the process of tender?
4. With regard to point No. (i), we may refer to the Judgment rendered by the Apex Court in Mahabir Auto Stores v. Indian Oil Corporation AIR 1990 SC 1032, wherein it was held thus:
...Every action of the State executive authority must be subject to rule of law and must be informed by reason. So, whatever be the activity of the public authority, in such monopoly or semi-monopoly dealings, it should meet the test of Article 14 of the Constitution. If a Governmental action even in the matters of entering or not entering into contracts, fails to satisfy the test of reasonableness, the same would be unreasonable.... It appears to us that rule of reason and rule against arbitrariness and discrimination, rules of fair play and natural justice are part of the rule of law applicable in situation or action by State instrumentality in dealing with citizens in a situation like the present one. Even though the rights of the citizens are in the nature of contractual rights, the manner, the method and motive of a decision of entering or not entering into a contract, are subject to judicial review on the touchstone of relevance and reasonableness, fair play, natural justice, equality and non-discrimination in the type of the transactions and nature of the dealing as in the present case.
In Tata Cellular v. Union of India , the Apex Court held that-
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 favouritism. However, it must be clearly stated that there are inherent limitations in exercise of that 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 Article 14 of the Constitution have to be kept in view while accepting or refusing a tender....
XXX XXX XXX The judicial power of review is exercise to rein in any unbridled executive functioning. The restraint has two contemporary manifestations. One is the ambit of judicial intervention; the other covers the scope of the Court's ability to quash an administrative decision on its merits. These restraints bear the hallmarks of judicial control over administrative action.
Judicial review is concerned with reviewing not the merits of the decision in support of which the application of judicial review is made, but the decision making process itself.
XXX XXX XXX 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.
4. reached a decision which no reasonable Tribunal would have reached or,
5. abused its powers.
In the aforesaid case it was further held as follows:
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.
(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.
In ABL International Ltd. v. Export Credit Guarantee Corporation of India Ltd. , the Supreme Court held that a Writ Petition involving serious disputed questions of facts which requires consideration of evidence which is not on record, will not normally be entertained by a Court under Article 226 of the Constitution of India, but there is no absolute rule that in all cases involving disputed questions of fact the parties should be relegated to a civil suit. It was further held that on a given set of facts if "the State" acts in an arbitrary manner even in a matter of contract, an aggrieved party can approach the Court by way of writ under Article 226 of the Constitution and the Court depending on facts of the said case is empowered to grant the relief. 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. Therefore, once the State or an instrumentality of the State is a party, it has an obligation in law to act fairly, justly and reasonably to a contract which is the requirement of Article 14 of the Constitution.
The contention of Learned Advocate General appearing for the State as well as Learned Counsel for P.P. No. 3 that Petitioner having participated in the process of tender could not challenge the same does not hold good. The Petitioner in course of argument brought to our notice the irregularity committed by the authorities while rejecting its tender. Being conscious of the decisions, as indicated in the foregoing paragraph, we are not inclined to delve into the claim of the Petitioner that it stands on a better footing than O.P. No. 3 and the Petitioner has a better experience and expertise in the field to get the tender. But the allegation of the Petitioner that there is an infirmity in the process of selection cannot be overlooked and the writ application of the Petitioner cannot be thrown away at the threshold on the aforesaid ground. In our considered opinion, the Petitioner has the locus standi to challenge the decision making process even it has participated in the process of tender.
5. Another aspect, which has been objected to by the Opposite Parties, is that no final decision on the tender having been taken and only a recommendation having been made by the Tender Committee, which has been placed before the Govt. for approval, no cause of action has arisen at present.
On perusing the records of the Excise Department concerning the tender in question, which were produced before us by the Learned Counsel for the State, we find that recommendation has been made to accept the price bid of O.P. No. 3 and to issue the order as per the terms and conditions of the tender. So, as it appears, the recommendation is only for the purpose of accepting the Price Bid as the final decision on the Technical Bid has already been taken.
6. Before scrutinizing the records relating to tender, it is worthwhile to mention here that the invitation of tenders for EALs is governed by a set of rules called the Board's Excise Rules, 1965. The Board of Revenue in exercise of the powers conferred by Section 90 of the Bihar and Orissa Excise Act, 1915 made the rules called the Board's Excise (Amendment) Rules, 2002 bringing an amendment to Rule 115-B. The aforesaid was notified on 1.2.2002 by the Board of Revenue -thereby totally substituting Rule 115-B of the Board Exercise Rules, 1965. The aforesaid Rules lay down in detail the manner in which the printing, procurement, storage, distribution and affixture of EALs shall be done.
With the aforesaid provisions of law governing the filed, we shall now examine the relevant records, i.e., File Nos. IEX-16/ 2007 and IEX-16/07 (Pt) of the Excise Department dealing with Floating of Tender for Printing of Excise Adhesive Labels, which were produced by the Learned Addl. Govt. Advocate.
As it appears from File No. IEX-16/2007, a proposal was initiated by the Commissioner of Excise, Orissa, on the decision of the Govt. to float a fresh tender for printing and supply of EALs in view of the provisions of the Board's Excise Rules observing all formalities and prior consultation with the Advocate General relating to W.P.(C) No. 12744/2005. The Govt. had decided that while determining tender condition both technical bids and price bids should be taken into consideration for quality and transparency. Accordingly, it was proposed that a Tender Committee should be constituted comprising the Commissioner-cum-Secretary to Govt., Excise Department, as its Chairman, and the Excise Commissioner, Orissa, representative of Law Department, Finance Department, Directorate of Export, Promotion and Marketing, Directorate of Printing, Stationary and Publication and the Excise Deputy Commissioner (CD.), Cuttack, and A.F.A.-cum-Under Secretary to Govt., Excise Department, as its members. This was duly approved by the Commissioner-cum-Secretary to Govt., in Excise Department, on 24.3.2007 and by the Minister of State for Excise on 5.4.2007. The Minister while according approval to the tender documents and to the constitution of the committee as proposed by the E.C. and the Commissioner-cum-Secretary to Govt., Excise Department, noted as follows:
...as floating of tender and its finalization may take some time, we have to look also the apprehension of E.C. As opined by E.C. after discussion the present procurement is of low quality compared to Polyester Hologram labels and can be duplicated. So, for the interim period we may authorize E.C. to procure high quality safe labels at a lesser price than procurement price of other Governments.
Apart from floating the tender, a decision was taken in course of finalization of the tender that these holograms shall be procured from the open market. Thereafter the first meeting of the Tender Committee was held on 1-5-2007. The proposal for constitution of Technical Sub-Committee consisting of the Commissioner of Excise, Orissa, as its Chairman and Deputy Excise Commissioner (CD), Cuttack, Director (Technical), Orissa Govt. Press, Cuttack, Asst. Director (Printing), Text Book Press, Bhubaneswar, and Deputy Director (Quality Control), Bhubaneswar, and two Technical Experts, one from the Central Scientific Instruments Organisation, Chandigarh, and the other from the Department of Printing Technology, Jadavpur University, Kolkata, as members, got the approval of the Govt. on 28.6.2007 and on 2.7.2007 the Technical Sub-Committee was formed. The notes dated 2.7.2007 of the A.F.A.-cum-Under Secretary indicates that request letters for sending technical experts with the terms and conditions had been transmitted to the aforesaid two organizations through E-mail on 18.6.2007, but no response had been received till then. The office note dated 27.7.2007 at page 15/n of the part file indicates that two technical experts from outside the State, i.e., one from CSIO, Chandigarh and the other from the Department of Printing Technology, Jadavpur University, had been intimated to attend the evaluation committee meeting on 30.7.2007 and the official correspondences had already been transmitted to them through fax and though they had received the fax, they did not confirm regarding their attending the evaluation committee meeting for which they were contacted over phone. The note sheets further, shows that CSIO asked for flight tickets in advance for to and fro journey of the expert to Bhubaneswar. Thereafter, it is indicated in the note sheet that there is no provision under the financial rules to allow flight tickets in advance to a non-Governmental person and in spite of the best effort, the Registrar, Jadavpur University, could not be contacted. The tender opening meeting was held at 11.00 a.m. on 30.7.2007 and after scrutiny, the technical bids of six bidders who participated in the tender process were handed over to the Technical Sub-Committee for technical evaluation. The Technical Sub-Committee evaluated the tenders on 30.7.2007. The proceeding of the meeting of the Technical Sub-Committee held on 21.8.2007 shows that the meeting was held in presence of the Chairman Shri Sudarsan Nayak, Excise Commissioner, Orissa, and the members, namely Shri S.P. Misra, Managing Director, O.S.B.C, Shri Suresh Chandra Panigrahi, E.D.C., Shri Hemanta Mishra, Director (Technical), O.G.P., ShriTushar Kanti Ghosh, Asst. Director, T.B.P.M. and Shri Sudhir Kumar Mishra, Asst. Director, E.P.M. It is indicated in the aforesaid proceeding that the Technical Sub-Committee opened the expert opinion given by Dr. A.K. Agrawal, Emeritus Scientist, CISR and went through the technical evaluation made by the expert of the samples of all the tenderers. The Committee, after due examination, decided to accept the technical evaluation and expert opinion of Dr. A.K. Agrawal. The technical evaluation of the labels made by the expert was decided to form part of the proceedings. So far as the Petitioner's sample is concerned, the Technical Sub-Committee observed as follows:
UFLEX LTD.
The tenderer does not have 2D/3D conventional master origination and recombine system and Dot Matrix of 4000 dpi though it possess Kenamex machine with dot matrix feature. The sample of the tenderer does not have the features of conventional, recombine, multi level animation effect and concealed animated image. The tenderer has also short of experience of 3 years on this technology. Therefore, the technical bid is not qualified.
7. Before we go into the aforesaid aspect, we find from the notes of the A.F.A.-cum-Under Secretary dated 31.7.2007 at page 18/n, that a letter from the Registrar, Jadavpur University, was received on 30.7.2007 at 1.30 P.M. which revealed that one Prof. Aun Kiran Pal of the Department of Printing Engineering and Technology had been nominated for the purpose and it had been stated therein that Prof. Pal be provided with Air Fare, T.A., accommodation, etc. As the aforesaid letter was received late, i.e., on the date the Technical Committee was going to evaluate the technical bids, no action was taken on the same. The evaluation of the technical bids by the Technical Committee was completed at about 7.30 P.M. when the draft proceeding-was finalized and signed by the Excise Commissioner, Orissa.
The Joint Secretary of the Dept. in his notes dated 2.8.2007 at page 21/n suggested that the Chairman of the Technical Sub-Committee, i.e., the Excise Commissioner, may take the responsibility to get the samples tested by any reliable agency decided by him and the same was approved by the Commissioner-cum-secretary with the observation to write to the expert as suggested by the Chairman of the Technical Sub-Committee and request for his expert opinion.
The entire process took a turn here. The decision to leave the matter to the Excise Commissioner to get the samples tested by any reliable agency decided by him is contrary to the decision of the State Govt., which is a conscious decision to include two technical experts, i.e., one from Jadavpur University and the other from CSIO, Chandigarh, in. the Technical Sub-Committee. Non-inclusion of those two technical experts was due to the reason of not granting to and fro air fare in advance to the expert from CSIO and on the ground of delay in receiving the consent from the expert of Jadavpur University. It is crystal clear that both these technical experts were kept out of the Technical Sub-Committee while evaluating the technical bids and the technical evaluation was done in the absence of the technical experts.
There is no decision of the State Govt. to exclude those two experts from the aforesaid Committee. As per Part-3 of the Tender Document, there are certain products specifications and one of such is Mastering Type to be evaluated by the experts:
Hologram Excise Labels having High Security Masters, made from both 2D/3D conventional origination system and DOT MATRIX digital origination system with 4000 DPI or more recombined together with multi level animation effect, four channel effect at a single point, pearl effect with text, washed raster image, concealed animated image and multiple LASER viewable animated covert image, two different laser viewable effect at the same point, kinetic and diffractive animated GUILLOCHE patterns (Randomly computer generated pattern) for high security. The logo or emblem as suggested by the Officer authorised by the Govt. shall be incorporated in the Hologram.
The aforesaid specification certainly requires evaluation by experts. The Committee which evaluated the technical bids can by no stretch of imagination be construed to be a Technical Sub-Committee so constituted by the Govt. So, in the eye of law, the evaluation of the technical bids of the tenderers has not been done by the Technical Sub-Committee constituted by the Govt.
It is further argued by the Learned Counsel for O.Ps.1,2 and 3 that the end products of the Petitioner as well as other bidders were tested by Dr. Agrawal. We fail to understand, if the Petitioner, did not have the experience of three years, as per the stand taken by the O.Ps., why the product of the Petitioner was at all sent to Dr. Agrawal for testing.
8. Be that as it may, let us now examine the records (File No. IEX-16/07 (Pt)) to know as to how Dr. Agrawal came into the picture when he was not a member of the Technical Sub-Committee.
We find a note made on 2.8.2007 in File No. 16/07 (Pt) indicating "Issue letter & other required documents to the expert in a sealed mail in speed post". But no name of any expert has been indicated there. We do not find any decision of the Govt. appointing Dr. Agrawal as an expert in the Technical Sub-Committee. The file does not show that any decision has been taken by the Govt. to appoint Dr. Agrawal as expert. But the A.F.A.-cum-Under Secretary of Excise Department in his notes dated 17.8.2007 has indicated-
Received a sealed packet from Dr. A.K. Agarwal through Sri Prakash Chandra Das of the office of Excise Commissioner, Orissa, Cuttack, by hand as the said packet had been handed over by Dr. Agarwal to Excise Commissioner, Orissa, Cuttack, who in turn transmitted the same to Govt. for the needful at about 11.20 A.M. today, i.e. 17.8.2007. The Excise Commissioner talked to me over phone for arranging the meeting of Technical Sub-Committee of Tender for Printing and supply of Excise Adhesive Labels and proposed to hold the meeting at 11.30 A.M. on 21.08.2007. For the sake of confidentiality and transparency, the meeting was scheduled to be held in the Office Chamber of Commissioner-cum-Secretary to Govt., Excise Department.
Thereafter in the notes dated 28.8.2007 of the A.F.A.-cum-Under Secretary the letter of the Excise Commissioner dated 27.8.2007 along with copies of two petitions one from Process Color and another from M/s. Ulfex Ltd. (the present Petitioner) with its enclosures have been dealt with. In the aforesaid petitions allegation has been made that Dr. A.K. Agrawal, who has examined the samples is a biased person. We are not going to examine the truth or otherwise of the aforesaid allegation. But a stand has been taken by the Govt. in the counter affidavit that-
...The decision that laboratory testing was required was taken by the Technical Sub-Committee on 30.7.2007. The fact that Dr. A.K. Agarwal was associated as the expert for conducting the laboratory testing was placed before the Technical Sub-Committee in their meeting on 21.8.2007 and got approved by the Technical Sub-Committee. However, it is a fact that two members of the Technical Sub-Committee, i.e. representatives of CSIR, Chandigarh and Jadavpur University, Kolkata were not given the notice to attend the Technical Sub-Committee meeting on 21.8.2007. This was perhaps by oversite, as these two outside members had not attended the meeting held on 30.7.2007 in which technical bids were scrutinized. Accordingly, samples of all the tenderers including the Petitioner along with tender document were sent to Dr. A.K. Agarwal the emeritus scientist of the Central Scientific Instrument Organisation, Chandigarh vide Excise Deptt. Letter No. 4021, dt.3.8.07 (Annexure 'G'). Dr. A.K. Agarwal, Emeritus Scientist, CSIR, Chandigarh in his letter dt.14.8.2007 has furnished his technical evaluation report of the samples of all the tenderers including the Petitioner (Annexure- 'H').
The Excise Commissioner in his communication dated 2.8.2007 to the A.F.A.-cum-Under Secretary to Govt., Excise Dept, suggested the name of the expert with his address, i.e., Dr. A.K. Agrawal, who on his telephonic discussion agreed to provide his expert opinion and stated that ten samples of each tenderer along with the tender documents and specifications, effects, etc. might be sent to Dr.Agrawal by regd. Post./speed post seeking his expert opinion at the earliest.
9. That apart, from the Govt. records we find that Hologram Manufacturers Association of India has recommended to the Excise Commissioner to utilize the expertise of Dr. A.K. Agrawal for sample evaluation. This is how Dr. Agrawal came into picture in the tender process. The report of Dr. Agrawal, which is annexed to the counter affidavit as Annexure-H, addressed to Sri P.K. Behra, OFS-I, Excise Department Orissa Secretariat, Bhubaneswar, states that - "However, the condition 'Standard quality adhesive material on the label suitable to be affixed through automatic mechanical-applicator' - this can be ascertained only on running the labels through a non-manual-mechanical-applicator." In the foot-note of the report, it is indicated that the above technical evaluation has been carried out in the absence of the artwork of the labels. From the above, it appears that even the complete samples including the art-work were not sent to Dr. A.K. Agrawal and so far as the standard quality is concerned, the same has not been evaluated by Dr. A.K. Agrawal. However, we are not going into the merits of the report of Dr. A.K. Agrawal. But the aforesaid action of the authorities shows their hastiness in completing the process making room for irregularity in the procedure. An allegation has been made by the Petitioner that the Excise Commissioner was in touch with O.P. No. 3-M/s. Holostik India Ltd. prior to issuance of tender notice. Perusal of the note-sheets shows that on 5.4.2007 a decision was taken by the Govt. authorizing the Excise Commissioner to procure high quality safe labels at a lesser price than the procurement price of other Govts. pending the tender process. The record reveals that the Excise Commissioner had issued a letter bearing No. 2207 dated 15.3.2007 to Shri L.D. Sarangi, O.A.S. (S), Joint Secretary to Govt., Excise Department, Orissa, regarding alternative arrangement for printing and supply of EALs basing upon which proposal for floating of tender was initiated. In that letter, the Excise Commissioner requested to authorize him to negotiate with M/s. Holistik India Ltd., the present O.P. No. 3, for supply of Polyester Hologram Excise Label of same size and quality supplied to the Tamil Nadu Govt. at a lesser price and to procure the same to meet the interim requirement. This shows that the Excise Commissioner was in touch with O.P. No. 3 before the tender process was started.
10. In a recent Judgment dated 11.9.2007 rendered by the Apex Court in Appeal (Civil) No. 3526 of 2007 Reliance Energy Ltd. v. Maharashra State Road Development Corporation Ltd. held-
22. We find merit in this civil appeal. Standards applied by Courts in judicial review must be justified by constitutional principles which govern the proper exercise of public power in a democracy. Article 14 of the Constitution embodies the principle of 'non-discrimination'. However, it is not a free-standing provision. It has to be read in conjunction with right conferred by other articles like Article 21 of the Constitution of the said Article 21 refers to 'right to life'. It includes 'opportunity'. In our view, as held in the latest Judgment of the Constitution Bench of nine-Judges in the case of I.R. Coelho v. State of Tamil Nadu , Article 21/14 is the heart of the chapter on fundamental rights. It covers various aspects of life. "Level playing field" is an important concept while construing Article 19(1)(g) of the Constitution. It is this doctrine which is invoked by REL/HDEC in the present case. When Article 19(1)(g) confers fundamental right to carry on business to a company, it is entitled to invoke the said doctrine of "level playing field". We may clarify that this doctrine is, however, subject to public interest. In the world of globalization, competition is an important factor to be kept in mind. The doctrine of "level playing field" is an important doctrine which is embodied in Article 19(1)(g) of the Constitution. This is because the said doctrine provides space within which equally-placed competitors are allowed to bid so as to sub serve the larger public interest. "Globalization", in essence, is liberalization of trade. Today India has dismantled licence-raj. The economic reforms introduced after 1992 have brought in the concept of "globalization". Decisions or acts which results in unequal and discriminatory treatment, would violate the doctrine of "level playing field" embodied in Article 19(1)(g). Time has come, therefore, to say that Article 14 which refers to the principle of 'equality' should not be read as a stand alone item but it should be read in conjunction with Article 21 which embodies several aspects of life. There is one more aspect which needs to be mentioned in the matter of implementation of the aforesaid doctrine of "level playing field". According to Lord Goldsmith - commitment to "rule of law" is the heart of parliamentary democracy. One of the important elements of the "rule of law" is legal certainty. Article 14 applies to government policies and if the policy or act of the government, even in contractual matters, fails to satisfy the test of 'reasonableness', then such an act or decision would be unconstitutional.
23. In the case of Union of India and Anr. v. International Trading Co. and Anr. , the Division Bench of this Court speaking through Pasayat, J. had held:
14. It is trite law that Article 14 of the Constitution applies also to matters of governmental policy and if the policy or any action of the Government, even in contractual matters, fails to satisfy the test of reasonableness, it would be unconstitutional.
15. While the discretion to change the policy in exercise of the executive power, when not trammeled by any statute or rule is wide enough, what is imperative and implicit in terms of Article 14 is that a change in policy must be made fairly arid should not give impression that it was so done arbitrarily or by any ulterior criteria. The wide sweep of Article 14 and the requirement of every State action qualifying for its validity on this touchstone irrespective of the field of activity of the State is an accepted tenet. The basic requirement of Article 14 is fairness in action by the state, and non-arbitrariness in essence and substance is the heart beat of fair play. Actions are amenable, in the panorama of judicial review only to the extent that the State must act validly for a discernible reasons, not whimsically for any ulterior purpose. The meaning and true import and concept of arbitrariness is more easily visualized than precisely defined. A question whether the impugned action is arbitrary or not is to be ultimately answered on the facts and circumstances of a given case. A basic and obvious test to apply in such cases is to see whether there is any discernible principle emerging from the impugned action and if so, does it really satisfy the test of reasonableness.
24. When tenders are invited, the terms and conditions must indicate with legal certainty, norms and benchmarks. This 'legal certainty' is an important aspect of the rule of law. If there is vagueness or subjectivity in the said norms it may result in unequal and discriminatory treatment. It may violate doctrine of "level playing field".
25. In the case of reliance Airport Developers (P) Ltd. v. Airports Authority of India and Ors. , the Division Bench of this Court has held that in matters of judicial review the basic test is to see whether there is any infirmity in the decision making process and not in the decision itself. This means that the decision-maker must understand correctly the law that regulates his decision-making power and he must give effect to it otherwise it may result in illegality. The principle of 'judicial review' cannot be denied even in contractual matters or matters in which the Government exercises its contractual powers, but judicial review is intended to prevent arbitrariness and it must be exercised in larger public interest.
In the case at hand, nowhere in the tender process we find that the Bihar and Orissa Excise Act and the Board's Excise Rules, 1965, which was amended in 2002 bringing Rule 115-B into existence, which governs the procurement, printing, storage, and distribution and affixture of the EALs, have been adopted or followed.
11. Applying the test as laid down by the Apex Court in Reliance Energy case (supra) and considering the facts narrated in the foregoing paragraphs, we are of the view that the Committee which evaluated the technical bids is not the Technical Sub-Committee as constituted by the State Govt. We, therefore, set aside the tender process from the stage of evaluation of the technical bids of the tenderers and direct to evaluate the technical bids of the tenderers afresh by including the technical experts in the Technical Sub-Committee.
12. Learned Addl. Govt. Advocate has filed a memo stating that they are willing to maintain transparency in the tender process and are prepared to send the samples submitted by the tenderers (four persons), who have not been selected, to any expert and basing on his report, the State is prepared to consider them subject to fulfillment of other conditions of M.I.T. In view of the above direction, we do not want to make any comment on this memo of the State Government. The Writ Petition is disposed of with the above direction and observations. Let the records produced by the State be returned forthwith.
A.K. Samantaray, J.
13. I agree.