Allahabad High Court
Jaiswal Canteen(A) Thru Proprietor & ... vs State Of U.P. Thru Prin. Secy. Medical & ... on 14 February, 2020
Equivalent citations: AIRONLINE 2020 ALL 237
Bench: Anil Kumar, Saurabh Lavania
HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH 1. A.F.R. Court No. - 3 Case :- MISC. BENCH No. - 4902 of 2019 Petitioner :- Jaiswal Canteen(A) Thru Proprietor & Anr. Respondent :- State Of U.P. Thru Prin. Secy. Medical & Education & Ors. Counsel for Petitioner :- Mohd. Mansoor,Mohammad Danish Counsel for Respondent :- C.S.C.,Dinesh Kumar Singh,I.P. Singh,Ramendra Kumar Yadav,Sanjay Bhasin,Sunil Sharma Hon'ble Anil Kumar,J.
Hon'ble Saurabh Lavania,J.
(As per Hon'ble Saurabh Lavania, J.)
1. Heard Shri Mohd. Mansoor, learned counsel for petitioners, learned State Counsel, learned counsel appearing for respondents no. 2 to 5 and Shri Sanjay Bhasin, Senior Advocate, assisted by Shri Sunil Sharma, appearing on behalf of respondent no. 6.
2. By means of present writ petition the petitioners has prayed for quashing of order dated 01.12.2018 by which respondent no. 6, M/s Hotel Rajasthan was declared as lowest bidder for providing Patient Kitchen and Dietary Services in Sanjay Gandhi Post Graduate Institute of Medical Sciences, Lucknow and consequential work order dated 01.12.2018, as contained in Annexure No. 1 to writ petition, issued in favour of respondent no. 6- M/s Hotel Rajasthan.
3. Shri Mohd. Mansoor, learned counsel for petitioners submits that the Director of Sanjay Gandhi Post Graduate Institute of Medical Sciences, Lucknow (hereinafter referred as 'Institute') on 28.09.2018 invited e-tender for ''Patient Kitchen and Dietary Services'. The said e-tender was in two parts, Technical Bid and Financial Bid. Subsequently, on 18.10.2018 and 14.11.2018 corrigendums were also issued. In response to the same the petitioners along with following firms submitted tender bid:
1) M/s Mohani Caterers, Ahmedabad.
2). M/s Buddha India Hotels Pvt Ltd, Lucknow.
3). M/s Capri Hospitality Services Pvt Ltd, Indore.
4). M/s Vrindavan Enterprises, Gorakhpur.
5). M/s Hotel Rajsthan, Khagaria.
6). M/s Amrit Foods, Lucknow.
3.1 Subsequently by means of impugned order dated 01.12.2018 (annexed as Annexure no. 1) tender in regard to ''Patient Kitchen and Dietary Services' in the 'Institute' has been awarded to respondent no. 6-
2. M/s Hotel Rajasthan, for an amount of Rs 7,19,82,470.12/- by the respondent 'Institute'.
3.2 The quotation submitted by various parties against the aforesaid e-tender is reproduced as under:
Price comparison-kitchen-Adv/NIT no. I-53/Contract/2018-19 Sheet-1 Sl. No. Diet No. of Projected Diets Price quoted by bidders M/s Mohani Caterers, Ahmedabad M/s Buddha India Hotels Pvt Ltd Lucknow M/s Capri Hospitality Services Pvt Ltd, Indore M/s Vrindavan Enterprises, Gorakhpur M/s Hotel Rajasthan, Khagaria Bihar M/s Jaiswal Canteen (A), Ahmedabad M/s Amrit Foods, Lucknow 1 1 2 3 4 5 6 7 8 9 2 G1 288731 49087157.31 49228635.30 49087157.31 49087157.31 49087157.31 49090044.62 49090044.62 3 G2 11249 1856197.49 1867334.00 1856197.49 1856197.49 1856197.49 1856309.98 1856309.98 4 G3 10059 1508950.59 1518909.00 1508950.59 1508950.59 1508950.59 1509051.18 1509051.18 5 P1 36636 8609826.36 8646096.00 8609826.36 8609826.36 8609826.36 8610192.77 8610192.72 6 P2 114 23371.14 23484.00 23371.14 23371.14 23371.14 23372.28 23372.28 7 P3 772 127387.72 128152.00 127387.72 127387.72 127387.72 127395.44 127395.44 8 High Protein Diet 141951 6389214.51 6529746.00 6389214.51 6389214.51 6389214.51 63906340.02 6390634.02 9 Nursing Hostel Diet 36500 4380365 4416500.00 4380365.00 4380365.00 4380365.00 4380730.00 4380730.00 Total 526012 71982470.12 72358856.50 71982470.12 71982470.12 71982470.12 71987730.24 71987730.24 Remarks Rejected in pursu ance to clause no. 5 of Corrigendum dated 18/20.10.2018 Rejected in pursuance to clause no. 5 of Corrigendum dated 18/20.10.2018 L-1 (Tie with bidders at column no. 6 & 7) L-1 (Tie with bidders at column no. 5 & 7) L-1 (Tie with bidders at column no. 5 & 6) L-2 L-2
4. Shri Mohd. Mansoor, learned counsel for petitioners while challenging the impugned order submitted that the action on part of the official respondents i.e. authorities of the ''Institute' thereby accepting the tender and awarding the work in question in favour of respondent no. 6 is contrary to terms and conditions of the e-tender and requires interference by this Court.
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5. Elaborating his arguments he submits that Clause 3 of Section II of the bid ''Instruction for Technical & Financial Bid', which is a part of e-tender, provides rejection of bid in certain contingencies. Under Sub-Clause ''d' of Clause ''3' it is mentioned that the bid shall be rejected if authenticity of any of the supporting document is found to be fabricated and in the instant case the bid of respondent no. 6 ought to have been rejected under Clause 3(d) of bid documents on account of reasons that:
(i) With tender documents respondent no. 6 submitted experience certificate dated 26.11.2018 issued by Hind Institute of Medical Sciences, however the said experience certificate is a forged document and in this regard he submitted that the Chairperson of Management Committee of Hind Institute of Medical Sciences has sent a letter stating therein that no such certificate was issued in favour of the respondent no. 6.
(ii) Respondent no. 6 in support of his bid also submitted experience certificate dated 27.11.2018 issued by the Nova Hospitals Limited, Lucknow. However, on enquiry, Dr. Pancham Singh, one of the authorities of the Nova Hospitals Limited, Lucknow clarified that M/s Hotel Rajasthan has provided dietary services on our verbal instructions to patients on chargeable basis but there was no written Agreement/MoU with M/s Hotel Rajasthan.
(iii) Respondent no. 6 also submitted experience certificate dated 19.11.2018 issued by Awadh Hospital and Heart Center, Lucknow and later on the said hospital clarified that the certificate dated 19.11.2018 which was issued in favour of the respondent no. 6 is to the fact that respondent no. 6 has provided services to patients on chargeable basis but there was no written Agreement/Contract with M/s Hotel Rajasthan.
6. Shri Mohd. Mansoor, learned counsel for petitioners further submits that as per Section II of the bid ''Instruction for Technical & Financial Bid', which is a part of e-tender, under Sub-Clause ''h' of Clause ''3' it is mentioned that the bid shall be rejected if the bid is found to be conditional and the bid of respondent no. 6, being conditional, ought to have been rejected and the same was not done by the ''Institute' which is in violation of term of tender document. In this regard he has placed reliance on the note made by respondent no. 6 in the Price Bid/Financial Bid (Annexure 6 to the writ petition) which reads as under:
"In column No. 4 (Quoted Amount of Overhead Expenses) our price 0 (Zero) is not accepted. Our price for column No.4 will
4. change to 0.01(one paisa) as we have not received any communication regarding our query for the same mailed on 28.11.2018. The contract value will change accordingly."
7. Learned counsel for petitioners further submitted that as per Clause ''2' of the corrigendum issued by the ''Institute' (which is annexed as Annexure no. 4 to the petition) says that ''The price in the ''Price Bid / Financial Bid', uploaded through corrigendum dated 18.10.2018 /20.10.2018 shall be quoted in Indian Rupees (INR) and its lowest unit shall be paisa'. However in the present case respondent no. 6 has quoted ''zero'. Thus violated the condition and accordingly, also, the bid of respondent no. 6 ought to have been rejected, however in utter violation of terms of tenter it has accepted.
8. Learned counsel for petitioners further submitted that clause ''7' of the Corrigendum/Clarifications to NIT/Adv. No. I-53/Contract/2018-19 for ''Patient Kitchen and Dietary Service' says that:
''Overhead expenses shall include fuel/gas, utensils, disposables, equipments and administrative charge and/or any other charge required to prepare diet as per specification, given in tender document or by the Institute.' 8.1 However, the respondent no. 6 in his tender towards ''overhead expenses' has mentioned ''zero', whereas the petitioner has mentioned Rs. 0.1/- and even then the tender respondent no. 6 has been accepted.
9. Lastly learned counsel for petitioners argued that the Tax Identification Number (TIN) which was mentioned by petitioners was canceled for the period 06.07.2011 to 2014 and during the said period no commercial transaction was made by respondent no. 6.
10. In support of his case, learned counsel for petitioners placed reliance on the law laid down by the Hon'ble Apex Court in the case of Jagdish Mandal vs State of Orissa & Others, (2007) 14 SCC 517, relevant part of which is as under:
'21. We may refer to some of the decisions of this Court, which have dealt with the scope of judicial review of award of contracts.
21.1) In Sterling Computers Ltd vs. M & N Publications Ltd [1993 (1) SCC 445], this Court observed :
"While exercising the power of judicial review, in respect of contracts entered into on behalf of the State, the court is concerned primarily as to whether there has been any infirmity in the decision making process the courts can certainly examine
5. whether 'decision making process' was reasonable, rational, not arbitrary and violative of Article 14 of the Constitution."
21.2) In Tata Cellular v. Union of India [AIR 1996 SC 11], this Court referred to the limitations relating to the scope of judicial review of administrative decisions and exercise of powers in awarding contracts, thus :
(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 action. 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. More often than not, such decisions are made qualitatively by experts. (5) The Government must have freedom of contract. In other words, a fairplay 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 facets 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.
This Court also noted that there are inherent limitations in the exercise of power of judicial review of contractual powers. This Court also observed that the duty to act fairly will vary in extent, depending upon the nature of cases, to which the said principle is sought to be applied. This Court held that the State has the right to refuse the lowest or any other tender, provided it tries to get the best person or the best quotation, and the power to choose is not exercised for any collateral purpose or in infringement of Article 14.
6. 21.3) In Raunaq Internationa Ltd. vs. I.V.R. Construction Ltd. [1999 (1) SCC 492], this Court dealt with the matter in some detail. This Court held : "The award of a contract, whether it is by a private party or by a public body or the State, is essentially a commercial transaction. In arriving at a commercial decision considerations which are of paramount importance are commercial considerations. These would be : (1) The price at which the other side is willing to do the work; (2) Whether the goods or services offered are of the requisite specifications; (3) Whether the person tendering has the ability to deliver the goods or services as per specifications. When large works contracts involving engagement of substantial manpower or requiring specific skills are to be offered, the financial ability of the tenderer to fulfil the requirements of the job is also important; (4) the ability of the tenderer to deliver goods or services or to do the work of the requisite standard and quality; (5) past experience of the tenderer, and whether he has successfully completed similar work earlier; (6) time which will be taken to deliver the goods or services; and often (7) the ability of the tenderer to take follow up action, rectify defects or to give post contract services. Even when the State or a public body enters into a commercial transaction, considerations which would prevail in its decision to award the contract to a given party would be the same. However, because the State or a public body or an agency of the State enters into such a contract, there could be, in a given case, an element of public law or public interest involved even in such a commercial transaction.
What are these elements of public interest? (1) Public money would be expended for the purposes of the contract; (2) The goods or services which are being commissioned could be for a public purpose, such as, construction of roads, public buildings, power plants or other public utilities. (3) The public would be directly interested in the timely fulfilment of the contract so that the services become available to the public expeditiously. (4) The public would also be interested in the quality of the work undertaken or goods supplied by the tenderer. Poor quality of work or goods can lead to tremendous public hardship and substantial financial outlay either in correcting mistakes or in rectifying defects or even at times in re-doing the entire work - thus involving larger outlays or public money and delaying the availability of services, facilities or goods, e.g. A delay in commissioning a power project, as in the present case, could lead
7. to power shortages, retardation of industrial development, hardship to the general public and substantial cost escalation. When a writ petition is filed in the High court challenging the award of a contract by a public authority or the State, the court must be satisfied that there is some element of public interest involved in entertaining such a petition. If, for example, the dispute is purely between two tenderers, the court must be very careful to see if there is any element of public interest involved in the litigation. A mere difference in the prices offered by the two tenderers may or may not be decisive in deciding whether any public interest is involved in intervening in such a commercial transaction. It is important to bear in mind that by court intervention, the proposed project may be considerably delayed thus escalating the cost far more than any saving which the court would ultimately effect in public money by deciding the dispute in favour of one tenderer or the other tenderer. Therefore, unless the court is satisfied that there is a substantial amount of public interest, or the transaction is entered into mala fide, the court should not intervene under Article 226 in disputes between two rival tenderers."
21.4) In Air India Ltd vs. Cochin International Airport Ltd [2000 (2) SCC 617], this Court summarized the scope of interference as enunciated in several earlier decisions thus :
"The award of a contract, whether it is by a private party or by a public body or the State, is essentially a commercial transaction. In arriving at a commercial decision considerations which are paramount are commercial considerations. The State can choose its own method to arrive at a decision. It can fix its own terms of invitation to tender and that is not open to judicial scrutiny. It can enter into negotiations before finally deciding to accept one of the offers made to it. Price need not always be the sole criterion for awarding a contract. It is free to grant any relaxation, for bona fide reasons, if the tender conditions permit such a relaxation, for bona fide reasons, if the tender conditions permit such a relaxation. It may not accept the offer even though it happens to be the highest or the lowest. But the State, its corporations, instrumentalities and agencies are bound to adhere to the norms, standards and procedures laid down by them and cannot depart from them arbitrarily. Though that decision is not amenable to judicial review, the court can examine the decision- making process and interfere if it is found vitiated by mala fides,
8. unreasonableness and arbitrariness. The State, its corporations, instrumentalities and agencies have the public duty to be fair to all concerned. Even when some defect is found in the decision-making process the court must exercise its discretionary power under Article 226 with great caution and should exercise it only in furtherance of public interest and not merely on the making out of a legal point. The court should always keep the larger public interest in mind in order to decide hether its intervention is called for or not. Only when it comes to a conclusion that overwhelming public interest requires interference, the court should intervene." [Emphasis supplied] 21.5) In Association of Registration Plates vs Union of India [2005 (1) SCC 679], this Court held:
"..Article 14 of the Constitution prohibits government from arbitrarily choosing a contractor at its will and pleasure. It has to act reasonably, fairly and in public interest in awarding contracts. At the same time, no person can claim a fundamental right to carry in business with the government. All that he can claim is that in competing for the contract, he should not be unfairly treated and discriminated, to the detriment of public interest. ..."
21.6) In B.S.N. Joshi v. Nair Coal Services Ltd [2006 (11) SCALE 526], this Court observed :
"It may be true that a contract need not be given to the lowest tenderer but it is equally true that the employer is the best judge therefor; the same ordinarily being within its domain, court's interference in such matter should be minimal. The High Court's jurisdiction in such matters being limited in a case of this nature, the Court should normally exercise judicial restraint unless illegality or arbitrariness on the part of the employer is apparent on the face of the record."
22. Judicial review of administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias and malafides. Its purpose is to check whether choice or decision is made 'lawfully' and not to check whether choice or decision is 'sound'. When the power of judicial review is invoked in matters relating to tenders or award of contracts, certain special features should be borne in mind. A contract is a commercial transaction. Evaluating tenders and awarding contracts are essentially commercial functions. Principles of equity and natural justice stay at a distance. If the decision relating to award of contract is bona fide
9. and is in public interest, courts will not, in exercise of power of judicial review, interfere even if a procedural aberration or error in assessment or prejudice to a tenderer, is made out. The power of judicial review will not be permitted to be invoked to protect private interest at the cost of public interest, or to decide contractual disputes. The tenderer or contractor with a grievance can always seek damages in a civil court. Attempts by unsuccessful tenderers with imaginary grievances, wounded pride and business rivalry, to make mountains out of molehills of some technical/procedural violation or some prejudice to self, and persuade courts to interfere by exercising power of judicial review, should be resisted. Such interferences, either interim or final, may hold up public works for years, or delay relief and succour to thousands and millions and may increase the project cost manifold. Therefore, a court before interfering in tender or contractual matters in exercise of power of judicial review, should pose to itself the following questions :
i) Whether the process adopted or decision made by the authority is mala fide or intended to favour someone.
OR Whether the process adopted or decision made is so arbitrary and irrational that the court can say : 'the decision is such that no responsible authority acting reasonably and in accordance with relevant law could have reached.'
ii) Whether public interest is affected.
If the answers are in the negative, there should be no interference under Article 226. Cases involving black-listing or imposition of penal consequences on a tenderer/contractor or distribution of state largesse (allotment of sites/shops, grant of licences, dealerships and franchises) stand on a different footing as they may require a higher degree of fairness in action.'
10. Learned counsel for petitioners also placed reliance on law laid down by the Hon'ble Apex Court in judgment dated 23.01.2019 passed in Civil Appeal No. 1050 of 2019 arising out of SLP(C) No. 27818 of 2018 Vidarbha Irrigation Development Corporation vs M/s Anoj Kumar Garwala, relevant part of which is as under:
''10. We may now come to Clause 2.35 which makes it clear that a substantially responsive bid is one which conforms to all terms, conditions and specifications without any material deviation. Inter alia, a material deviation is one which limits, in any substantial way, or is inconsistent with the bidding documents or the
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employer's rights or bidder's obligations under the Contract. It cannot be gainsaid that a bank guarantee, which is for a period of six months and not for a period of 40 months, would not only be directly inconsistent with the bidding documents but would also be contrary to the employers' right to a bank guarantee for a longer period. This being the case, since a material deviation from the terms and conditions of the tender document was made by Respondent No. 2, when it furnished a bank guarantee for only six months initially, it would be clear that such bid would have to be considered as not substantially responsive and ought to have been rejected by the employer. Clause 2.35.2 also makes it clear that such a bid would have to be rejected outrightly and may not be subsequently made responsive by correction.
13. The law on the subject is well settled. In Bakshi Security and Personnel Services Pvt. Ltd. v. Devkishan Computed Pvt. Ltd. and Ors., (2016) 8 SCC 446, this Court held:
"14. The law is settled that an essential condition of a tender has to be strictly complied with. In Poddar Steel Corpn. v. 12 Ganesh Engg. Works [Poddar Steel Corpn. v. Ganesh Engg. Works, (1991) 3 SCC 273] this Court held as under: (SCC p. 276, para 6) "6. ... The requirements in a tender notice can be classified into two categories-those which lay down the essential conditions of eligibility and the others which are merely ancillary or subsidiary with the main object to be achieved by the condition. In the first case the authority issuing the tender may be required to enforce them rigidly. In the other cases it must be open to the authority to deviate from and not to insist upon the strict literal compliance of the condition in appropriate cases."
15. Similarly in B.S.N. Joshi & Sons Ltd. v. Nair Coal Services Ltd. [B.S.N. Joshi & Sons Ltd. v. Nair Coal Services Ltd., (2006) 11 SCC 548] this Court held as under: (SCC pp. 571-72, para 66) "(i) if there are essential conditions, the same must be adhered to;
(ii) if there is no power of general relaxation, ordinarily the same shall not be exercised and the principle of strict compliance would be applied where
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it is possible for all the parties to comply with all such conditions fully; (iii) if, however, a deviation is made in relation to all the parties in regard to any of such conditions, ordinarily again a power of relaxation may be held to be existing; (iv) the parties who have taken the benefit of such relaxation should not ordinarily be allowed to take a different stand in relation to compliance with another part of tender contract, particularly when he was also not in a position to comply with all the conditions of tender fully, unless the court otherwise finds relaxation of a condition which being essential in nature could not be relaxed and thus the same was wholly illegal and without jurisdiction; (v) when a decision is taken by the appropriate authority upon due consideration of the tender document submitted by all the tenderers on their own merits and if it is ultimately found that successful bidders had in fact substantially complied with the purport and object for which essential conditions were laid down, the same may not ordinarily be interfered with;..." 16. We also agree with the contention of Shri Raval that the writ jurisdiction cannot be utilised to make a fresh bargain between parties.
14) However, learned counsel appearing on behalf of the appellant strongly relied upon Afcons Infrastructure Ltd v. Nagpur Metro Rail Corpn. Ltd, (2016) 16 SCC 818, and paragraphs 14 and 15 in particular, which state:
"14. We must reiterate the words of caution that this Court has stated right from the time when Ramana Dayaram Shetty v. International Airport Authority of India [Ramana Dayaram Shetty v. International Airport Authority of India, (1979) 3 SCC 489] was decided almost 40 years ago, namely, that the words used in the tender documents cannot be ignored or treated as redundant or superfluous -- they must be given meaning and their necessary significance. In this context, the use of the word "metro" in Clause 4.2(a) of Section III of the bid documents and its
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connotation in ordinary parlance cannot be overlooked. 15. We may add that the owner or the employer of a project, having authored the tender documents, is the best person to understand and appreciate its requirements and interpret its documents. The constitutional courts must defer to this understanding and appreciation of the tender documents, unless there is mala fide or perversity in the understanding or appreciation or in the application of the terms of the tender conditions. It is possible that the owner or employer of a project may give an interpretation to the tender documents that is not acceptable to the constitutional courts but that by itself is not a reason for interfering with the interpretation given."
15) It is clear even on a reading of this judgment that the words used in the tender document cannot be ignored or treated as redundant or superfluous - they must be given meaning and their necessary significance. Given the fact that in the present case, an essential tender condition which had to be strictly complied with was not so complied with, the appellant would have no power to condone lack of such strict compliance. Any such condonation, as has been done in the present case, would amount to perversity in the understanding or appreciation of the terms of the tender conditions, which must be interfered with by a constitutional court."
11. Reliance has also been placed on the law laid down by Hon'ble Apex Court in the case of Sobhikaa Impex (P) Ltd & another vs Central Medical Services Society (2016) 16 SCC 233, relevant part of which is as under:
"19. The thrust of the matter is whether the decision by the Registration Committee by itself can be regarded as grant of registration certificate. It is luminescent that its decision to grant registration certificate is subject to conditions. Apart from that, it had not granted any certificate but only a decision was taken. There is a clear distinction between a decision taken and the decision acted upon or given effect to. Therefore, the appellant cannot claim benefit of the said decision. The appellants cannot lay stress on clause 5.4.1 to avail the benefit of treating itself as a
13. responsive bidder. As far as Instructions to Bidders is concerned, the initial clause was that the bidder must be registered under CIB under the Act and the documentary evidence in this regard shall be submitted along with the bid. Amendment elaborating the same postulates that the registration certificate shall be submitted along with the bid at the time of opening of the tender and if it is not done, the bid shall be held as non-responsive. A submission is advanced by the first respondent that it is a clarificatory condition. As we have already opined, decision by the Registration Committee of CIB to provisionally approve registration does not amount to registration by itself with the CIB. So the condition, as such, was not satisfied under the unamended stipulation. The amended clause only provides about the consequence thereof. It can be stated without any shadow of doubt that even if clause 6 would not have been amended, the first respondent, on the ground of non-production of the registration certificate, would have been legally justified to reject the bid. It is an essential condition incorporated in the Instructions to Bidders. In this context, we may profitably refer to the authority in B.S.N. Joshi & Sons Ltd. v. Nair Coal Services Ltd. and others where a two-Judge Bench, after referring to series of judgments has culled out the following principles:-
"(i) if there are essential conditions, the same must be adhered to; (ii) if there is no power of general relaxation, ordinarily the same shall not be exercised and the principle of strict compliance would be applied where it is possible for all the parties to comply with all such conditions fully;
(iii) if, however, a deviation is made in relation to all the parties in regard to any of such conditions, ordinarily again a power of relaxation may be held to be existing;
(iv) the parties who have taken the benefit of such relaxation should not ordinarily be allowed to take a different stand in relation to compliance with another part of tender contract, particularly when he was also not in a position to comply with all the conditions of tender fully, unless the court otherwise finds relaxation of a condition which being essential in nature could not be relaxed and thus the same was wholly illegal and without jurisdiction;
(v) when a decision is taken by the appropriate authority upon due consideration of the tender document submitted by all the tenderers on their own merits and it it is ultimately found that successful bidders had in fact substantially complied with the purport and object for which essential conditions were laid down, the same may not ordinarily be interfered with;
(vi) the contractors cannot form a cartel. If despite the same, their bids are considered and they are given an offer
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to match with the rates quoted by the lowest tenderer, public interest would be given priority;
(vii) where a decision has been taken purely on public interest, the court ordinarily should exercise judicial restraint."
20. In Master Marine Services (P) Ltd. v. Metcalfe & Hodgkinson (P) Ltd and another, it has been held that the State can choose its own method to arrive at a decision and it is free to grant any relaxation for bona fide reasons, if the tender conditions permit such a relaxation. It has been further held that the State, its corporations, instrumentalities and agencies have the public duty to be fair to all concerned. Even when some defect is found in the decision-making process, the court must exercise its discretionary powers under Article 226 with great caution and should exercise it only in furtherance of public interest and not merely on the making out of a legal point.
21. In Jagdish Mandal v. State of Orissa and others, it has been ruled that when the power of judicial review is invoked in matters relating to tenders or award of contracts, certain special features should be borne in mind. A contract is a commercial transaction. Evaluating tenders and awarding contracts are essentially commercial functions. Principles of equity and natural justice stay at a distance. If the decision relating to award of contract is bona fide and is in public interest, courts will not, in exercise of power of judicial review, interfere even if a procedural aberration or error in assessment or prejudice to a tenderer, is made out. The power of judicial review will not be permitted to be invoked to protect private interest at the cost of public interest, or to decide contractual disputes.
22. In Union of India and another v. International Trading Co. and another, it has been held that the basic requirement of Article 14 is fairness in action by the State, and non-arbitrariness in essence and substance is the heartbeat of fair play. Actions are amenable, in the panorama of judicial review only to the extent that the State must act validly for a discernible reason, not whimsically for any ulterior purpose. It has been further opined that 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.
23. In Jespar I. Slong v. State of Meghalaya and others, this Court stated that fixation of a value of the tender is entirely within the purview of the executive and courts hardly have any role to play in this process except for striking down such action of the executive as is proved to be arbitrary or unreasonable.
24. Keeping in view the aforesaid authorities, we have to consider whether the High Court has fallen into error by not interfering with the grant of contract in favour of the fourth respondent. As the factual analysis would reveal, the appellant No.1 had not filed
15. an application for grant of registration. It was appellant No.2 who had filed it. Be that as it may, the decision dated 31.03.2015 was taken by the Registration Committee of CIB to approve the registration subject to the condition DAC granting permission for commercialization. That apart, the decision taken by the concerned authority, even if it is put on the website, despite the astute submission of Mr. Singh, would not tantamount to grant of registration certificate. The amendment was made, as we perceive, to clarify the position. We have already stated, even if the amendment was not brought in, the first respondent would have been in a position, by applying objective standards, to treat the appellants' bid as non-responsive and non-compliant. The use of the word "must" adds a great degree of certainty to the same; it is a requisite parameter as thought of by the respondent No.1. The tender was floated for purchase which is needed for the nation. The first respondent along with respondent Nos.2 and 3 were taking immense precaution. In such a circumstance, needless to emphasize, public interest is involved. It cannot succumb to private interest. The action on the part of the respondent Nos.1 to 3 cannot be regarded as arbitrary or unreasonable. By no stretch of imagination it can be construed to be an act which is not bonafide or to have been done to favour the fourth respondent. Nothing has been pleaded that the fourth respondent is not eligible or qualified. In our considered opinion, the essential condition of tender being not met with, the tenderer, the appellants herein, were ineligible and the tender was non-responsive. That apart, the amendment was applicable to all. Additionally, the High Court in the first round of litigation had not held that the registration certificate granted on 31.03.2015 would enure to the benefit of the writ petitioners from the date of the decision of the registration authority, and it had rightly not said so. Judged from any angle, we do not perceive any substance in the grounds raised in this appeal."
12. In view of the above learned counsel for petitioners prayed that the order dated 01.12.2018 issued by the ''Institute', which is annexed as Annexure No. 1 to writ petition, is liable to be set aside.
13. Per contra, Shri Sanjay Bhasin, Senior Advocate, appearing for ''Institute' submitted that so far as the submission of learned counsel for petitioners, on the basis of Sub-clause ''d' of clause ''3' of Section II of the bid ''Instruction for Technical & Financial Bid', which is a part of e-tender, i.e. authenticity of experience certificates, is concerned, it has no force and is misconceived because in the present case the experience certificate dated 26.11.2018 issued by Hind Institute of Medical Sciences, Lucknow was not considered in view of two affidavits submitted by the respondent no. 6 and conflicting communications of Hind Institute of
16. Medical Sciences, Lucknow and tender of respondent no. 6 has been accepted being L-1 and subject to verification of the experience certificates submitted by the respondent no. 6. In this regard he has placed reliance on Minutes of Meetings dated 23.02.2019 and impugned order dated 01.12.2018. The relevant part of Minutes of Meetings reads as under:
"Since the two affidavit furnished by M/s Hotel Rajasthan are not precise as per tender conditions and as per conflicting, communications from Hind Institute, the experience of Hind Institute of Medical Sciences, Lucknow should not be considered while making calculation for deciding eligible successful bidder."
13.1 It appears from impugned order dated 01.12.2018 that tender of respondent no. 6 was accepted being L-1 and subject to verification of the experience certificate.
14. Shri Sanjay Bhasin further submits that so far as the arguments raised by learned counsel for petitioners in regard to experience of Patient Kitchen and Dietary Services rendered by the respondent no. 6 in Nova Hospitals Limited, Lucknow and in Awadh Hospital and Heart Center, Lucknow is concerned, there was no written agreement / MoU with respondent no. 6 with these parties.
14.1 However the concerned have categorically stated that M/s Hotel Rajasthan/respondent no. 6 had provided Patient Kitchen and Dietary Services to patients and also certified their respective certificates dated 27.11.2018 and 19.11.2018 issued in favour of respondent no. 6. The reliance has been placed on the Minutes of Visit (Annexure No. RA-1 to rejoinder affidavit), relevant portion of the same reads as under:
"2. Nova Hospital Limited, Lucknow:
The committee met Dr Pancham Singh, the Hospital Medical Superintendent and enquired about the issuance of experience certificate dated 27.11.2018. Dr Pancham Singh confirmed about issuance of the certificate dated 27.11.2018 and further clarified that M/s Hotel Rajasthan had provided dietary services on our verbal instructions to patients on chargeable basis but there was no written agreement/MOU with M/s Hotel Rajasthan.
The letter ref no Nil dt 24.12.2018 addressed to Pro Uttam Singh, Joint Director(admin) issued by Hospital Medical Superintendent is attached herewith as Annexure II.
3. Awadh Hospital and Heard Centre Lucknow:
17.
The committee met Chief Finance Officer, Mr Satyendra Bhawani, and enquired about the issuance of experience certificate dated 19.11.18. Mr Bhawani confirmed that the experience letter dated 19.11.18 was issued by him and further clarified that M/S Hotel Rajsthan has provided services to patients on chargeable basis but there was no written agreement/contract with M/S Hotel Rajasthan."
14.2 In addition to the above facts, Shri Sanjay Bhasin submitted that so far as experience is concerned, as a matter of fact, respondent no. 6 is providing catering services in the ''Institute' since 2014 and there is no complaint whatsoever in regard to services.
15. Shri Sanjay Bhasin, also submitted that so far as argument raised by learned counsel for petitioners, based on Sub-Clause ''h' of Clause ''3' of Section II of the bid ''Instruction for Technical & Financial Bid', which is a part of e-tender, is concerned, it does not, in any manner, debar from quoting "zero" in the technical bid/financial bid and in fact it is not a conditional bid.
16. Shri Sanjay Bhasin, learned counsel appearing on behalf of ''Institute' has further submitted that so far as arguments raised by learned counsel for petitioners in regard to validity of Tax Identification Number (TIN) is concerned, the same has been renewed in favour of respondent no. 6 with retrospective effect and as such the argument which has been raised by learned counsel for petitioners in this regard has got no force.
17. In view of the facts as stated above Shri Sanjay Bhasin, Learned Senior Advocate, further submitted that in view of the law laid down by Hon'ble Apex Court in Civil Appeal No. 3588 of 2019 (arising out of SLP(C) No. 46 of 2019) Caretel Infotech Ltd vs Hindustan Petroleum Corporation Ltd & Others, no interference in matter is required by this Court. Relevant part of judgment is as under:
''36. We consider it appropriate to make certain observations in the context of the nature of dispute which is before us. Normally parties would be governed by their contracts and the tender terms, and really no writ would be maintainable under Article 226 of the Constitution of India. In view of Government and Public Sector Enterprises venturing into economic activities, this Court found it appropriate to build in certain checks and balances of fairness in procedure. It is this approach which has given rise to scrutiny of tenders in writ proceedings under Article 226 of the Constitution of India. It, however, appears that the window has been opened too wide as almost every small or big tender is now sought to be
18. challenged in writ proceedings almost as a matter of routine. This in turn, affects the efficacy of commercial activities of the public sectors, which may be in competition with the private sector. This could hardly have been the objective in mind. An unnecessary, close scrutiny of minute details, contrary to the view of the tendering authority, makes awarding of contracts by Government and Public Sectors a cumbersome exercise, with long drawn out litigation at the threshold. The private sector is competing often in the same field. Promptness and efficiency levels in private contracts, thus, often tend to make the tenders of the public sector a non-competitive exercise. This works to a great disadvantage to the Government and the Public Sector.'
18. Shri Sanjay Bhasin, learned counsel for respondent no. 6, further submits that out of seven (7) firms, which submitted the e-tender bid, financial bid of two bidders namely M/s Mohini Caterers, Ahmedabad and M/s Buddha India Hotels Pvt Ltd Lucknow were in violation of condition no. 5 of corrigendum dated 18.10.2018 and due to which the same were rejected. Two bidders namely M/s Jaiswal Canteen (A), Ahmedabad and M/s Amrit Foods, Lucknow were declared as L-2. He further submits that thereafter the financial bid of three lowest bidders namely M/s Capri Hospitality Services Pvt Ltd, Indore, M/s Vrindavan Enterprises, Gorakhpur and M/s Hotel Rajasthan, Khagaria, Bihar were considered and decided according to tie breaker by respondent ''Institute'.
18.1 After considering the tender documents/bids submitted by three L-1 bidders, named above and taking into consideration Clause 1(i) and 1(ii) of the corrigendum dated 14.11.2018 the respondent no. 6 was declared successful bidder.
19. Shri Sanjay Bhasin learned counsel for respondent no. 2 to 5 and Shri Sunil Sharma, learned counsel appearing on behalf of respondents no. 6 have stated the writ petition for the reliefs claimed by the petitioners i.e. for quashing of the order dated 01.12.2018, passed in favour of respondent no. 6, by issuance a writ of certiorari with consequential reliefs is not maintainable as if it would be issued then it would be futile exercise as bid of petitioners is L-2 and other two bidders namely M/s Capri Hospitality Services and M/s Vrindavan Enterprises are L-1, who were in tie alongwith respondent no. 6 and in this view the bid in issue cannot be finalised in favour of petitioners. In this regard reliance has been placed on judgment of Hon'ble Apex Court in the case of Bihar State Financial Corporation & Others vs Chemicot India (P) Ltd & Others (2006) 7 SCC 293, relevant part of which is as under:
19.
''11. We, therefore, in the peculiar facts if this case, are of the opinion that it would be futile to issue a writ of or in the nature of mandamus directing the Corporation to pay the aforementioned amount of Rs.15 lakhs to the respondent-Company. We may, however, hasten to add that we have not gone into the question as to whether the respondent-Company had paid any amount to the Corporation as against the loan amount which had admittedly been received by it. If the respondent-Company had not done so, the Corporation may take such steps in relation thereto, as it may be advised in this behalf but it goes without saying that it would be open to the respondent-Company to raise such contentions, including the payment of additional subsidy to it and/or effect thereof in the proceedings, which may be initiated by the Corporation. We are, therefore, of the opinion that the impugned judgment cannot be sustained. It is set aside accordingly.'
20. Accordingly, it is submitted by learned counsel for respondents that the present writ petition lacks merits and is liable to be dismissed.
21. We have heard arguments of learned counsel for parties and perused the record.
22. In view of the settled legal proposition in respect of interference by this Court in the contractual matter or tender process, we have considered the facts and submissions made by the counsels for the respective parties.
23. Undisputedly the respondent no. 6 (M/s Hotel Rajasthan), M/s Vrindavan Enterprises and M/s Capri Hospitality Services Pvt. Ltd. were declared L-1 (Lowest Bidder) and in the tie breaker, after taking into account Clause 1 (i) and (ii) of the Corrigendum dated 14.11.2018, the contract was awarded to respondent no. 6 vide impugned order dated 01.12.2018, which was subject to verification of experience certificate and petitioner firm was declared L-2 and after verification the certificates issued by Nova Hospital, Lucknow and Awadh Hospital and Heart Centre, Lucknow, where found genuine, as appears from Annexure No. RA-1 (Minutes of Visit, signed by Three Member Committee of the Institute for verifying the genuineness of experience certificates submitted by respondent no. 6, the relevant part of which is quoted hereinabove) to the rejoinder affidavit filed by the petitioners, and the experience certificate given by the Hind Institute of Medical Sciences, Lucknow was not considered in view of affidavits furnished by the respondent no. 6 and conflicting communications made by Hind Institute of Medical Sciences, Lucknow, as appears from Annexure No. RA-3 (Minutes of the CRFC Meeting held on 23.02.2019, the relevant part of which is quoted hereinabove) to the rejoinder affidavit filed by the
20. petitioners. Accordingly, we find that the challenge of award of contract to the respondent no. 6 on the ground of experience certificate by the petitioners is unsustainable.
24. The next contention/ground of the petitioners is based on Sub Clause (h) of Clause 3 of Section II of the bid "Instruction for Technical & Financial Bid" on which basis it has been stated that the bid submitted by the respondent no. 6 was conditional and ought to have been rejected. In this regard we find from the record i.e. Annexure No. 6 to the writ petition (Price Bid/Financial Bid), wherein it is mentioned that "L-1 bidder shall be the bidder, whose total quoted rates at column no. 7 (sum of column no. 7) are found to be LOWEST" and Criteria for deciding L-1 mentioned in Clause 4(ii) wherein it is mentioned that "The L-1 bidder shall be decided after adding the rates of all the meals i.e. G-1, G-2, G-3, P-1, P-2, P-3, High Protein Diet and Nursing Hostel Diet and standing at lowest out of all the eligible bids" and accordingly it is undisputed that the total amount mentioned in column no. 7 was to be considered while deciding L-1 and in the column no. 7 of the Price Bid/Financial Bid (Annexure No. 6 to the writ petition) submitted by the respondent no. 6, no condition has been mentioned and the note mentioned therein to our view is not a material deviation from the terms and conditions of the tender and on the basis of amount mentioned in column no. 7 the respondent no. 6 declared L-1. Accordingly, we are of the view that the contention of the petitioners that the tender was conditional and ought to have been rejected has no force.
25. In regard to the challenge of award of contract to respondent no. 6 on the ground that as per corrigendum the price in the "Price Bid/Financial Bid" shall be quoted in Indian Rupees and its lowest unit shall be Paisa and in the instant case the respondent no. 6 in the Financial Bid has mentioned "0" (Zero) in column no. 4 of Price Bid/Financial Bid and as such violated the condition of the corrigendum and accordingly accepting the tender in the favour of respondent no. 6 is illegal and arbitrary as well as unjustifiable, we considered the condition no. 2 of the corrigendum annexed as Annexure No. 4 to the writ petition and found that the said condition does not say that the "0" (Zero) could not be mentioned. It is without going to say that "1" (one) is the lowest natural number and "0" is lowest whole number. In view of the same mentioning of "0" (Zero) in Financial Bid by the respondent no. 6, in our view, would not vitiate the financial bid submitted by respondent no. 6.
26. The last ground taken by the petitioners for challenging the award of contract in favour of respondent no. 6 vide order dated 01.12.2018 to the effect that the respondent no. 6 was not having the valid TIN number has
21. also got no force as the TIN number was revived from the retrospective date, as specifically mentioned in para 12 of the counter affidavit filed by the respondent no. 6 and this fact has not been refuted by the petitioners.
27. In addition to above we would also like to observe that the admitted fact is that the petitioner firm was declared L-2 and in addition to respondent no. 6 there were two other firms namely, M/s Vrindavan Enterprises and M/s Capri Hospitality Services Pvt. Ltd., which were declared L-1 and accordingly even if we interfere in matter the tender would not fall in the lap of petitioners and being so as well as in view of the observations made in para 21, which is quoted below, of the judgment passed by the Hon'ble Apex Court in the case of Dr. N. C. Singhal Vs. Union of India, reported as (1980) 3 SCC 29, the writ petition filed by the petitioners challenging the order dated 01.12.2018 is not maintainable.
"21. ............ Even if their promotions are struck down appellant will not get any post vacated by them. Incidentally High Court also upheld their promotions observing that by the time the petition was heard each one of them had requisite service qualification and, therefore, the promotions could not be struck down. Once the challenge on merits fails the second string to the bow need not be examined. Having said all this, appellant is least competent to challenge their promotions. In a slightly comparable situation this Court in Chitra Ghosh Vs. Union of India, (1969) 2 SCC 228, observed as under:
The other question which was canvassed before the High Court and which has been pressed before us relates to the merits of the nominations made to the reserved seats. It seems to us that the appellants do not have any right to challenge the nominations made by the Central Government. They do not compete for the reserved seats and have no locus standi in the matter of nomination to such seats. The assumption that if nominations to reserved seats are not in accordance with the rules all such seats as have not been properly filled up would be thrown open to the general pool is wholly unfounded."
28. Needless to say that the respondent no. 6 is providing the services to the Institute and an agreement in regard to providing the services has also been executed on 31.03.2019.
29. For the foregoing reasons, the writ petition for the reliefs sought lack merit and accordingly dismissed. No order as to costs.
Order Date :- 14.02.2020/J.K. Dinkar (Saurabh Lavania,J.) (Anil Kumar,J.)