Allahabad High Court
Ravi Offset Printers And Publishers Pvt ... vs State Of U.P. And 2 Others on 25 May, 2022
Author: Vivek Kumar Birla
Bench: Vivek Kumar Birla
HIGH COURT OF JUDICATURE AT ALLAHABAD Court No. - 40 Case :- WRIT - C No. - 15087 of 2022 Petitioner :- Ravi Offset Printers And Publishers Pvt Ltd Respondent :- State Of U.P. And 2 Others Counsel for Petitioner :- Kunal Ravi Singh,Manjari Singh Counsel for Respondent :- C.S.C. Hon'ble Vivek Kumar Birla,J.
Hon'ble Vikas Budhwar,J.
1. Heard Sri Kunal Ravi Singh, learned counsel for the petitioner as well as Sri Ved Prakash Mishra, learned Standing Counsel, who appears on behalf of the respondent nos.1, 2 and 3.
2. This is a petition under Article 226 of the Constitution of India seeking following reliefs:-
"(I) Issue a writ order or direction in nature of certiorari quashing the sub clause 1 and 4 of clause 9(A) of tender dated 12.05.2022 (Annexure-1) with regard to ineligibility of the petitioner to apply for the tender.
(II) Any other or further relief which the Court may deem fit and proper under the facts and circumstances of the case"
(III) Award the cost of writ petition."
3. Essentially the relief so sought in the present writ petition is for issuance of a writ, order or direction in the nature of certiorari quashing the sub-clause 1 and 4 of clause 9(A) of the e-tender dated 12.05.2022 so sought to be floated by Madhyamik Shiksha Parishad, Prayagraj (second respondent) referable to the supply of National Council for Educational Research and Training (NCERT) books referable to the academic year 2022-23.
4. Sri Kunal Ravi Singh, learned counsel for the petitioner has challenged the provisions contained under clause 1 and 4 of clause 9(A) of e-tender dated 12.05.2022 on the following grounds:-
(A). E-tender dated 12.05.2022 containing the conditions under the heading sub clause 1 and 4 of clause 9 (A) is not only arbitrary discriminatory and illegal but it is violative under Article 19 of the Constitution of India.
(B). Merely because certain disputes have been raised by second respondent, Madhyamik Shiksha Parishad with regard to payment of royalty and GST for the preceding academic years, it will not denude the petitioner of its fundamental right to profess its trade while participating in the tender and exclude it from the zone of consideration.
(C). Zone of consideration cannot be compartmentalised in such a manner so as to exclude in participating in the bid particularly when the stage of screening would come subsequently, when the bids are to be finalized.
(D). In absence of any quantification of the amount of royalty and GST so claimed by the second respondent, the same cannot partake the character of a dispute or exclude the petitioner from zone of consideration.
5. Incidentally, the petitioner herein had preferred Civil Misc. Writ Petition No.13077 of 2022 (Ravi Offset Printers and Publishers Pvt. Ltd. vs. State of U.P. and Others) seeking following reliefs:-
"(I) Issue a writ order or direction in nature of certiorari quashing the sub clause 1 and 4 of clause 9 (A) of tender dated 21.04.2022 (Annexure-1) with regard to ineligibility of the petitioner to apply for the tender.
(II) Any other or further relief with the Court may deem fit and proper under the facts and circumstances of the case;
(III) Award the cost of writ petition."
6. Principally, in the above noted writ petition challenge was laid to sub clause 1 and 4 of clause 9(A) of the e-tender dated 21.04.2022 which also contained the conditions being sub clause 1 and 4 of clause 9(A) wherein the challenge so made in the present writ petition referable to the offending provisions was also laid. The above noted writ petition being Writ Petition No.13077 of 2022 (Ravi Offset Printers and Publishers Pvt. Ltd. vs. State of U.P. and Others) came to be decided by this Court vide order dated 11.05.2022 which is being extracted in extenso:-
"1. The extent and the scope of judicial interference in writ jurisdiction in the matter of tenders so floated by public authorities is the subject matter of present proceedings.
2. Factual matrix of the case as worded in the present petition are that the petitioner claims itself to be a private limited company by the name and style of Ravi Offset Printers And Publishers Pvt. Ltd. having its office at C-60, 61, 62, 63 EPIP, Shasti puram, Agra-282007 engaged in the trade of printing and supply of books pertaining to educational stream in the State of U.P. According to the petitioner, it applied for e-tender referable to the academic years 2020-2021 and 2021-2022 for providing the books pertaining to NCERT (National Council of Educational Research and Training). It has come on record that in the year 2020 itself the petitioner participated in the e-tender and deposited the earnest money in the form of FDR no. 774111 for an amount of Rs. 12,62,000/- along with the prescribed tender fee and thereafter, the petitioner was found to be the lowest bider and awarded contract which eventually culminated into execution of agreement of 03.03.2020 between the second respondent (Madhyamik Shiksha Parishad) on one hand and the petitioner on the other hand for the purpose in printing and supply of NCERT books for class IXth to XIIth for the student studying in Government aided/unaided recognized schools in State of U.P.. It has further been averred that a work order was on 07.03.2020 with regard to printing and distribution of of NCERT books.
3. Pleadings further reveals that due to the onslaught of the pandemic relating Covid-19 a nationwide lockdown was put to motion resulting that all the commercial activities came to stands still and the petitioner could not execute agreements and honour the commitments and the obligations which it wanted to discharge as a bidder. On account of the circumstances so occasioned as referred to above certain disputes arose between the petitioner and the second respondent with regard to the payment of royalty and GST amount necessitating issuance of demand notice dated 12.03.2020, 18.06.2020, 10.08.2020, 01.10.2020, 24.11.2020 and 30.12.2020 seeking recovery of a certain amount. The petitioner herein as per its own saying took recourse to arbitration while invoking arbitration clause and thereafter, preferred an Arbitration and Cancellation Application under Section 11(4) no. 14 of 2021 being (Ravi Offset Printers And Publishers Pvt. Ltd. s. Madhyamic Siksha Parishad U.P.) before the Court which came to be decided while appointing one of the retired judge of this Court as the sole arbitrator. Record further reveals that the petitioner preferred claim petition before the sole arbitrator which is annexed as annexure-3 at page no. 36 of the petition along with stay application seeking following reliefs:-
"(ii) Set-aside the Impugned Demand Notices dated 12.03.2020, 18.06.2020, 10.08.2020, 01.10.2020 & 24.11.2020 as well as impugned Order dated 30.12.2020.
(iv) Direct the Opposite Party to discharge/release the FDR No.774111 dated 03.02.2020, amounting to Rs. 12,62,000/-, deposited by the Claimant as Earnest Money Deposit."
4. According to the learned counsel for the petitioner the arbitration proceeding which are stated to be pending before the sole arbitrator being arbitration case no. 14 of 2021 was begin lingered on, on account of non-cooperation of respondents as they have not even deposited the fee of the learned Arbitrator and in fact on 22.03.2022 the petitioner got deposited the entire fee execution of the respondents herein
5. Record further reveals that an e-tenders has been again issued by the second respondent on 21.04.2022 for procurement of books of NCERT for the academic year 2022-2023 for class IXth to XIIth copy of the e-tender dated 21.04.2022 is at page no. 16 of the writ petition.
6. Relevant extract of the offending provision of e-tender notice dated 21.04.2022 referable to the academic year 2022-2023 which is subject matter of the present petition is being quoted hereinunder:-
"पूर्व के ऐसे प्रकाशक / मुद्रक जिन पर माध्यमिक शिक्षा परिषद, उत्तर प्रदेश का जी०एस०टी० सहित रायल्टी बकाया है उनकी निविदायें विचारणीय नहीं होगी।
किसी प्रकार का विधिक विवाद शिक्षा विभाग के साथ न हो।"
7. Alleging the sub clause 1 and sub clause 4 of clause 9 (A) of e-tender dated 21.04.2022 being in violation of Article 19 of the Constitution of India besides being arbitrarily discriminatory, the petitioner herein has filed the present petition seeking following reliefs:-
"(I) Issue a writ order or direction in nature of certiorari quashing the sub clause 1 and 4 of clause 9 (A) of tender dated 21.04.2022 (Annexure-1) with regard to ineligibility of the petitioner to apply for the tender.
(II) Any other or further relief with the Court may deem fit and proper under the facts and circumstances of the case;
(III) Award the cost of writ petition."
8. Heard Sri Shashi Nandan,learned Senior Counsel assisted by Sri Kunal Ravi Singh, learned counsel for the petitioner as well as Sri Amit Kumar Singh, learned Additional Chief Standing who appears for the respondents.
9. Sri Shashi Nandan learned Standing Counsel assisted by Sri Kunal Ravi Singh has made the following submissions:-
A. The e-tender dated 21.04.2022 containing the conditions under the heading sub clause 1 and 4 of clause 9 (A) is not only arbitrary discriminatory and illegal but it is violative under Article 19 of the Constitution of India.
B. Merely because certain disputes have been raised by second respondent, Madhyamik Shiksha Parishad with regard to payment of royalty and GST for the preceding academic years, it will not denude the petitioner of its fundamental right to profess its trade while participating in the tender and exclude it from the zone of consideration.
C. Zone of consideration cannot be compartmentalised in such a manner so as to exclude in participating in the bid particularly when the stage of screening would come subsequently, when the bids are to be finalized.
D. In absence of any quantification of the amount of royalty and GST so claimed by the second respondent, the same cannot partake the character of a dispute or exclude the petitioner from zone of consideration.
10. Sri Amit Kumar Singh, learned Additional Chief Standing Counsel has opposed the writ petition while arguing that the present wit petition so instituted at the behest of the petitioner, is not maintainable as by virtue of the present writ petition, the petitioner is seeking relief of alteration of the terms and the condition so embodied in the e-tender. It has been further argued by Sri Singh that it is the province of the employer/tender issuing authority to engraft terms and conditions which is not within the realm of Article 226 of the Constitution of India. In nutshell, the submission of learned Additional Chief Standing Counsel is to the extent that the petitioner being one of the aspirant cannot dictate that a particular condition should be engrafted in the tender which suits to it.
11. We have heard the learned counsels for the parties and perused the record.
12. Undisputedly, petitioner claims itself to be one of the aspirant who wanted to participate in the e-tender so issued on 21.04.2022 for procurement of books of NCERT for the academic year 2022-2023 for the class of IXth to XIIth.
13. According to Sri Shashi Nandan, learned Senior Counsel, the only obstacle which denudes the petitioner to come within the zone of consideration is sub clause 1 and 4 of Clause 9 (A) of the e-tender dated 21.04.2022.
14. So far as the sub clause on of Clause 9 (A) of e-tender itself provides that one of the essential condition to participate in the e-tender is this that an aspirant should not be defaulter with respect to payment of royalty and GST. Similarly, the sub clause 4 of Clause 9 (A) of the tender condition itself shows that an intending party who participates in the tender should not have any legal dispute with respondent no. 2, Madhyamik Shiksha Parishad.
15. In case in hand this Court finds that there exists certain disputes referable to non-payment of royalty and GST at the end of the petitioner pursuant thereon demand notices were issued for recovery of certain amount which was quantified and the same was carried in arbitration pursuant whereto by the order of this Court sole arbitration has been appointed for the arbitration proceedings are stated to be pending.
16. Now a question arises as to whether, the conditions so embodied in sub clause 1 and 4 of Clause 9 (A) of the e-tenders can be held to be illegal arbitrary or violative of Article 19 of the Constitution of India at the behest of the petitioner wherein the petitioner admittedly has certain disputes with the respondent no. 2 and the matter is stated to pending before arbitrator wherein after quantification of the amount referable to royalty and GST demand notice has been issued.
17. Another issue which needs to be noticed is the scope of judicial intervention in the matter of prescription the covenant/terms and the conditions engrafed in the tender.
18. The Hon'ble Apex Court in the case of Bareilly Development Authority And Another Vs. Ajai Pal Singh And Others reported in 1989 (2) SCC 116 in paragraph no. 22 has observed as under:-
"22. There is a line of decisions where the contract entered into between the State and the persons aggrieved is non- statutory and purely contractual and the rights are governed only by the terms of the contract, no writ or order can be issued under Article 226 of the Constitution of India so as to compel the authorities to remedy a breach of contract pure and simple Radhakrishna Agarwal & Ors. v. State of Bihar & Ors., [1977] 3 SCR 249; Premji Bhai Parmar & Ors. etc. v. Delhi Development Authority & Ors, [1980] 2 SCR 704 and D.F.O. v. Biswanath Tea Company Ltd. 1981 3 SCR 662."
19. The Hon'ble Apex Court in the case of State of Gujrat and Anothers vs. Meghji Pethraj Shah Charitable Trust And Others 1994 (3) SCC 552 in paragraph no. 22 has observed as under:-
"22. We are unable to see any substance in the argument that the termination of arrangement without observing the principle of natural justice (audi alterant partem) is void. The termination is not a quasi-judicial act by any stretch of imagination; hence it was not necessary to observe the principles of natural justice. It is not also an executive or administrative act to attract the duty to act fairly. It was - as has been repeatedly urged by Sri Ramaswamy - a matter governed by a contract/agreement between the parties. If the matter is governed by a contract, the writ petition is not maintainable since it is a public law remedy and is not available in private law field, e.g., where the matter is governed by a non-statutory contract. Be that as it may, in view of our opinion on the main question, it is not necessary to pursue this reasoning further."
20. In the case of State of U.P. and Others vs. Bridge & Roof Company (India) Ltd. reported in 1996 (6) SCC 22, the Hon'ble Apex Court in paragraph nos. 15 and 16 has observed as under:-
"15. In our opinion,the very remedy adopted by the respondent is misconceived. It is not entitled to any relief in these proceedings,i.e,in the writ petition filed by it.The High court appears to be right in not pronouncing upon any of the several contentions raised in the writ petition by both the parties and in merely reiteration the effect of the order of the Deputy commissioner made under the proviso to section 8-D (1).
16. Firstly, the contract between the parties is a contract in the realm of private law. It is governed by the provisions of the contract Act or may be,also by certain provisions of the sale of Goods Act.Any dispute relating to interpretation of the terms and conditions of such a contract cannot be agitated, and could not have been agitated,in a writ petition. That is a matter either for arbitration as provided by the contract of for Civil court as the case may be. whether any amount is due to the respondent from the appellant-Government under the contract and,if so,how much and the further question whether retention or refusal to pay any amount by the Government is justified, or not are all matters which cannot be agitated in or adjudicated upon in a writ petition. The prayer in the writ petition,viz.,to restrain the Government from deducting particular amount from the writ petitioner's bill(s) was not a prayer which could be granted by the High court under Article 226. Indeed, the High Court has not granted the said prayer."
21. In the case of India Thermal Power Ltd. vs. State of M.P. And Others 2000 (3) SCC 379, the Hon'ble Apex Court in paragraph no. 11 has observed as under:-
"11. It was contended by Mr. Cooper, learned senior counsel appearing for appellant GBL and also by some counsel appearing for other appellants that the appellant/IPPs had entered into PPAs under Sections 43 and 43A of the Electricity Supply act and as such they are statutory contracts and, therefore, MPEB had no power or authority to alter their terms and conditions. This contention has been upheld by the High Court, in our opinion the said contention is not correct and High Court was wrong in accepting the same. Section 43 empowers Electricity Board to enter into arrangement for purchase of electricity on such terms as may be agreed. Section 43 A(l) provides that a generating company may enter into a contract for the sale of electricity generated by it with Electricity Board, As regards the determination of tariff for the sale of electricity by a generating company to the Board, Section 43(1)(2) provides that the tariff shall be determined in accordance with the norms regarding operation and plant load factor as may be laid down by the authority and in accordance with the rates of depreciation and reasonable return and such other factors as may be determined from time to time by the Central Government by a notification in the official gazette. These provisions clearly indicate that the agreement can be on such terms as may be agreed by the parties except that the tariff is to be determined in accordance with the provision con-tained in section 43A(2) and notifications issued thereunder. Merely be-cause a contract is entered into in exercise of an enabling power conferred by a statute that by itself cannot render the contract a statutory contract. If entering into a contract containing prescribed terms and conditions is a must under the statute then that contract becomes a statutory contract. If a contact incorporates certain terms and conditions in it which are statutory then the said contract to that extent is statutory. A contact may contain certain other terms and conditions which may not be of a statutory character and which have been incorporated therein as a result of mutual agreement between the parties. Therefore, the PPAs can be regarded as statutory only to the extent that they contain provisions regarding deter-mination of tariff and other statutory requirements of Section 43A(2). Opening and maintaining of an Escrow Account or an Escrow Agreement are not the statutory requirements and, therefore, merely because PPAs contemplate maintaining Escrow Accounts that obligation cannot be regarded as statutory."
22. Proposition of law so called out in the above noted judgments itself draws irresistible conclusion that merely because a contract has been floated by the Government or its instrumentalities would not be said to be a statutory contract amenable to writ jurisdiction as even otherwise there is a marked difference between a contract floated as a commercial venture and a statutory contract.
23. Another facet which needs to be addressed is with regard to the fact as to the scope of judicial intervention in the matter of tenders and contracts while using judicial platform so as to advise the tender enacting authority to include certain conditions and to exclude some conditions which finds its presence in the contract itself.
24. The Hon'ble Apex Court in the case of Tata Cellular vs. Union of India reported in 1994 (6) SCC 651 in paragraph no. 94 has observed as under:-
"94. The principles deducible from the above are :
(1) The modem 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.
Based on these principles we will examine the facts of this case since they commend to us as the correct principles."
25. In the case of Caretel Infotech Limited vs. Hindustan Petroleum Corporation Limited And Others reported in 2019 (14) SCC 81, the Hon'ble Apex Court in paragraph nos. 37 to 43 has observed as under :-
"37. 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 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.
38. In Afcons Infrastructure Limited v. Nagpur Metro Rail Corporation Limited & Anr.3, this Court has expounded further on this aspect, while observing that the decision making process in accepting or rejecting the bid should not be interfered with. Interference is permissible only if the decision making process is arbitrary or irrational to an extent that no responsible authority, acting reasonably and in accordance with law, could have reached such a decision. It has been cautioned that Constitutional Courts are expected to exercise restraint in interfering with the administrative decision and ought not to substitute 3 (2016) 16 SCC 818 their view for that of the administrative authority. Mere disagreement with the decision making process would not suffice.
39. Another aspect emphasised is that the author of the document is the best person to understand and appreciate its requirements. In the facts of the present case, the view, on interpreting the tender documents, of respondent No.1 must prevail. Respondent No.1 itself, appreciative of the wording of clause 20 and the format, has taken a considered view. Respondent No.3 cannot compel its own interpretation of the contract to be thrust on respondent No.1, or ask the Court to compel respondent No.1 to accept that interpretation. In fact, the Court went on to observe in the aforesaid judgment that it is possible that the author of the tender may give an interpretation that is not acceptable to the Constitutional Court, but that itself would not be a reason for interfering with the interpretation given. We reproduce the observations in this behalf as under:
"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."
40. We may also refer to the judgment of this Court in Nabha Power Limited (NPL) v. Punjab State Power Corporation Limited (PSPCL) & Anr.,4 authored by one of us (Sanjay Kishan Kaul, J.). The legal principles for interpretation of commercial contracts have been discussed. In the said judgment, a reference was made to the observations of the Privy Council in Attorney General of Belize v. Belize Telecom Ltd. 5 as under:
"16. Before discussing in greater detail the reasoning of the Court of Appeal, the Board will make some general observations about the process of implication. The court has no power to improve upon the instrument which it is called upon to construe, whether it be a contract, a statute or articles of association. It cannot introduce terms to make it fairer or more reasonable. It is concerned only to discover what the instrument means. However, that meaning is not necessarily or always what the authors or parties to the document would have intended..." .... .... .... .... ....
"19. .....In Trollope & Colls Ltd. v. North West Metropolitan Regional Hospital Board [1973] 1 WLR 601, 609 Lord Pearson, with whom Lord Guest and Lord Diplock agreed, said:
"the court does not make a contract for the parties. The court will not even improve the contract which the parties have made for themselves, however desirable the improvement might be. The court's function is to interpret and apply the contract which the parties have made for themselves. If the express terms are perfectly clear and free from ambiguity, there is no choice to be made between different possible meanings: the clear terms must be applied even if the court thinks some other terms would have been more suitable. An unexpressed term can be implied if and only if the court finds that the parties must have intended that term to form part of their contract: it is not enough for the court to find that such a term would have been adopted by the parties as reasonable men if it had been suggested to them: it must have been a term that went without saying, a term necessary to give business efficacy to the contract, a term which, though tacit, formed part of the contract which the parties made for themselves."
41. Nabha Power Limited (NPL)6 also took note of the earlier judgment of this court in Satya Jain (Dead) Through LRs. and Ors. vs. Anis Ahmed Rushdie (Dead) Through LRs. and Ors.7, which discussed the principle of business efficacy as proposed by Bowen, L.J. in the Moorcock8. It has been elucidated that this test requires that terms can be implied only if it is necessary to give business efficacy to the contract to avoid failure of the contract and only the bare minimum of implication is to be there to achieve this goal. Thus, if the contract makes business sense without the implication of terms, the courts will not imply the 6 (supra) 7 (2013) 8 SCC 131 8 (1889) LR 14 PD 64 (CA) same.
42. The judgment in Nabha Power Limited (NPL) 9 concluded with the following observations in para 72:
"72. We may, however, in the end, extend a word of caution. It should certainly not be an endeavour of commercial courts to look to implied terms of contract. In the current day and age, making of contracts is a matter of high technical expertise with legal brains from all sides involved in the process of drafting a contract. It is even preceded by opportunities of seeking clarifications and doubts so that the parties know what they are getting into. Thus, normally a contract should be read as it reads, as per its express terms. The implied terms is a concept, which is necessitated only when the Penta-test referred to aforesaid comes into play. There has to be a strict necessity for it. In the present case, we have really only read the contract in the manner it reads. We have not really read into it any ''implied term' but from the collection of clauses, come to a conclusion as to what the contract says. The formula for energy charges, to our mind, was quite clear. We have only expounded it in accordance to its natural grammatical contour, keeping in mind the nature of the contract."
43. We have considered it appropriate to, once again, emphasise the aforesaid aspects, especially in the context of endeavours of courts to give their own interpretation to contracts, more specifically tender terms, at the behest of a third party competing for the tender, rather than what is propounded by the party framing the tender. The object cannot be that in every contract, where some parties would lose out, they should get the 9 (supra) opportunity to somehow pick holes, to disqualify the successful parties, on grounds on which even the party floating the tender finds no merit."
26. Following the judgments, the Hon'ble Apex Court in the case of Uflex Limited vs. Government of Tamil Nadu And Others reported in 2022 (1) SCC 165 in paragraph no. 43 has observed as under :-
"43. The present dispute has its history in many prior endeavours by the original petitioners which have proved to be unsuccessful. It does appear that in a competitive market they have not been so successful as they would like to be. Merely because a company is more efficient, obtains better technology, makes more competitive bids and, thus, succeeds more cannot be a factor to deprive that company of commercial success on that pretext. It does appear to us that this is what is happening; that the two original petitioners are endeavouring to continuously create impediments in the way of the succeeding party merely because they themselves had not so succeeded. It is thus our view that the Division Bench has fallen into an error in almost sitting as an appellate authority on technology and commercial expediency which is not the role which a Court ought to play."
27. Recently, in the case of National High Speed Rail Corporation Limited vs. Montecarlo Limited And Another reported in AIR (2022) SC 866, the Hon'ble Supreme Court in paragraph nos. 7.6, 7.7, 7.8, 7.8(1), 7.8(2), 7.8(3) and 7.8(4) has observed as under :-
"7.6 At this stage, it is to be noted that what can be said to be substantially responsive Technical Bid has been defined under Article 33.2. The High Court in the impugned order has observed and held that the Bid submitted by the original writ petitioner can be said to be substantially responsive Technical Bid. However, it is required to be noted that when the author of the tender document, in the present case, JICC/JICA, had taken a conscious decision that the Bid submitted by the respondent - original writ petitioner can be said to be non-responsive and suffering from material deviation, it was not for the High Court to consider/opine whether the Bid submitted by the original writ petitioner is substantially responsive Technical Bid or not unless the decision is found to be perverse and/or suffered from mala fides and/or favoritism.
7.7 At the cost of repetition, it is to be noted that under the contractual obligation, it was not open for the appellant - corporation and/or even the Republic of India to deviate from any of the terms and conditions of the loan agreement and/or the decision of JICC/JICA. Therefore, in absence of any allegation of mala fides/arbitrariness and/or favouritism, we are of the opinion that the High Court has committed a grave error in interfering with a conscious decision taken by the JICC/JICA, which has been followed by the appellant.
7.8 At this stage, few decisions of this Court on the interference by the Courts in the tender matters are required to be referred to:-
7.8.1 In the case of Afcons Infrastructure Limited Vs. Nagpur Metro Rail Corporation Limited, AIR 2016 SC 4305, this Court in paras 11 to 13 and 15 has observed and held as under :-
"11. Recently, in Central Coalfields Ltd. v. SLL-SML (Joint Venture Consortium), (2016) 8 SCC 622, it was held by this Court, relying on a host of decisions that the decision- making process of the employer or owner of the project in accepting or rejecting the bid of a tenderer should not be interfered with. Interference is permissible only if the decision-making process is mala fide or is intended to favour someone. Similarly, the decision should not be interfered with unless the decision is so arbitrary or irrational that the Court could say that the decision is one which no responsible authority acting reasonably and in accordance with law could have reached. In other words, the decision- making process or the decision should be perverse and not merely faulty or incorrect or erroneous. No such extreme case was made out by GYT-TPL JV in the High Court or before us.
12. In Dwarkadas Marfatia and Sons v. Port of Bombay, (1989) 3 SCC 293, it was held that the constitutional courts are concerned with the decision-making process. Tata Cellular v. Union of India, (1994) 6 SCC 651 went a step further and held that a decision if challenged (the decision having been arrived at through a valid process), the constitutional courts can interfere if the decision is perverse. However, the constitutional courts are expected to exercise restraint in interfering with the administrative decision and ought not to substitute its view for that of the administrative authority. This was confirmed in Jagdish Mandal v. State of Orissa, (2007) 14 SCC 517, as mentioned in Central Coalfields Ltd. v. SLL-SML (Joint Venture Consortium), (2016) 8 SCC 622 (AIR) 2016 SC 3814
13. In other words, a mere disagreement with the decision-making process or the decision of the administrative authority is no reason for a constitutional court to interfere. The threshold of mala fides, intention to favour someone or arbitrariness, irrationality or perversity must be met before the constitutional court interferes with the decision-making process or the decision.
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.
7.8.2 In the case of B.S.N. Joshi & Sons Ltd. Vs. Nair Coal Services Ltd. and Ors., (2006) 11 SCC 548, after considering the various decisions of this Court on the point enumerated in para 66, this Court has observed and held as under:
"66. We are also not shutting our eyes towards the new principles of judicial review which are being developed; but the law as it stands now having regard to the principles laid down in the aforementioned decisions may be summarised as under:
(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 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;
(vi) the contractors cannot form a cartel. If despite the same, their bids are considered and they are given an offer 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.
7.8.3 In the case of Michigan Rubber (India) Limited Vs. State of Karnataka, (2012) 8 SCC 216, after considering various other decisions of this Court on the point, more particularly, after considering the decisions in the case of Jagdish Mandal (supra) and Tejas Constructions and Infrastructure (P) Ltd. (supra), in paras 23 and 24, this Court has observed and held as under:
"23. From the above decisions, the following principles emerge:
(a) The basic requirement of Article 14 is fairness in action by the State, and non-arbitrariness in essence and substance is the heartbeat of fair play. These actions are amenable to the judicial review only to the extent that the State must act validly for a discernible reason and not whimsically for any ulterior purpose. If the State acts within the bounds of reasonableness, it would be legitimate to take into consideration the national priorities;
(b) Fixation of a value of the tender is entirely within the purview of the executive and the courts hardly have any role to play in this process except for striking down such action of the executive as is proved to be arbitrary or unreasonable. If the Government acts in conformity with certain healthy standards and norms such as awarding of contracts by inviting tenders, in those circumstances, the interference by courts is very limited;
(c) In the matter of formulating conditions of a tender document and awarding a contract, greater latitude is required to be conceded to the State authorities unless the action of the tendering authority is found to be malicious and a misuse of its statutory powers, interference by courts is not warranted;
(d) Certain preconditions or qualifications for tenders have to be laid down to ensure that the contractor has the capacity and the resources to successfully execute the work; and
(e) If the State or its instrumentalities act reasonably, fairly and in public interest in awarding contract, here again, interference by court is very restrictive since no person can claim a fundamental right to carry on business with the Government.
24. Therefore, a court before interfering in tender or contractual matters, in exercise of power of judicial review, should pose to itself the following questions:
(i) Whether the process adopted or decision made by the authority is mala fide or intended to favour someone; or whether the process adopted or decision made is so arbitrary and irrational that the court can say: "the decision is such that no responsible authority acting reasonably and in accordance with relevant law could have reached"? and
(ii) Whether the public interest is affected? If the answers to the above questions are in the negative, then there should be no interference under Article 226."
7.8.4 In the case of the Central Coalfields Limited & Anr. Vs. SLL- SML [A Joint Venture Consortium] and Ors., (2016) 8 SCC 622, it is specifically observed and held by this Court that the Court must, as far as possible, avoid a construction which would render the words used by the author of the document meaningless and futile or reduce to silence any part of the document and make it altogether inapplicable. It is further observed that whether a term of NIT is essential or not is a decision taken by the employer, which should be respected and soundness of that decision cannot be questioned by Court. In the case before this Court, the bid was rejected for non furnishing of bank guarantee in prescribed format. While submitting EMD by furnishing bank guarantee in format prescribed by GTC of another tender and the bidder took the plea that bank guarantee format of present tender was ambiguous. Rejecting the claim of the bidder and upholding the decision of the employer of rejection of bid for non-compliance of submitting the bank guarantee in prescribed format, this Court in paras 31 to 38, 42 to 44, 47 to 49, 52, 55 and 56 has observed and held as under:
"31. We were informed by the learned Attorney General that 9 of the 11 bidders furnished a bank guarantee in the prescribed and correct format. Under these circumstances, even after stretching our credulity, it is extremely difficult to understand why JVC was unable to access the prescribed format for the bank guarantee or furnish a bank guarantee in the prescribed format when every other bidder could do so or why it could not seek a clarification or why it could not represent against any perceived ambiguity. The objection and the conduct of JVC regarding the prescribed format of the bank guarantee or a supposed ambiguity in NIT does not appear to be fully above board.
32. The core issue in these appeals is not of judicial review of the administrative action of CCL in adhering to the terms of NIT and the GTC prescribed by it while dealing with bids furnished by participants in the bidding process. The core issue is whether CCL acted perversely enough in rejecting the bank guarantee of JVC on the ground that it was not in the prescribed format, thereby calling for judicial review by a constitutional court and interfering with CCL's decision.
33. In Ramana Dayaram Shetty v. International Airport Authority of India, (1979) 3 SCC 489, this Court held that the words used in a document are not superfluous or redundant but must be given some meaning and weightage: (SCC p. 500, para 7) "7. ... It is a well-settled rule of interpretation applicable alike to documents as to statutes that, save for compelling necessity, the Court should not be prompt to ascribe superfluity to the language of a document "and should be rather at the outset inclined to suppose every word intended to have some effect or be of some use". To reject words as insensible should be the last resort of judicial interpretation, for it is an elementary rule based on common sense that no author of a formal document intended to be acted upon by the others should be presumed to use words without a meaning. The court must, as far as possible, avoid a construction which would render the words used by the author of the document meaningless and futile or reduce to silence any part of the document and make it altogether inapplicable."
34. In Ramana Dayaram Shetty case, the expression "registered IInd Class hotelier" was recognised as being inapt and perhaps ungrammatical; nevertheless common sense was not offended in describing a person running a registered IInd grade hotel as a registered IInd class hotelier. Despite this construction in its favour, Respondent 4 in that case were held to be factually ineligible to participate in the bidding process.
35. It was further held that if others (such as the appellant in Ramana Dayaram Shetty case) were aware that non-fulfilment of the eligibility condition of being a registered IInd class hotelier would not be a bar for consideration, they too would have submitted a tender, but were prevented from doing so due to the eligibility condition, which was relaxed in the case of Respondent 4. This resulted in unequal treatment in favour of Respondent 4 -- treatment that was constitutionally impermissible. Expounding on this, it was held: (SCC p. 504, para 10) "10. ... It is indeed unthinkable that in a democracy governed by the rule of law the executive Government or any of its officers should possess arbitrary power over the interests of the individual. Every action of the executive Government must be informed with reason and should be free from arbitrariness. That is the very essence of the rule of law and its bare minimal requirement. And to the application of this principle it makes no difference whether the exercise of the power involves affectation of some right or denial of some privilege." (emphasis supplied)
36. Applying this principle to the present appeals, other bidders and those who had not bid could very well contend that if they had known that the prescribed format of the bank guarantee was not mandatory or that some other term(s) of NIT or GTC were not mandatory for compliance, they too would have meaningfully participated in the bidding process. In other words, by rearranging the goalposts, they were denied the "privilege" of participation.
37. For JVC to say that its bank guarantee was in terms stricter than the prescribed format is neither here nor there. It is not for the employer or this Court to scrutinise every bank guarantee to determine whether it is stricter than the prescribed format or less rigorous. The fact is that a format was prescribed and there was no reason not to adhere to it. The goalposts cannot be rearranged or asked to be rearranged during the bidding process to affect the right of some or deny a privilege to some.
38. In G.J. Fernandez v. State of Karnataka, (1990) 2 SCC 488, both the principles laid down in Ramana Dayaram Shetty were reaffirmed. It was reaffirmed that the party issuing the tender (the employer) "has the right to punctiliously and rigidly" enforce the terms of the tender. If a party approaches a court for an order restraining the employer from strict enforcement of the terms of the tender, the court would decline to do so. It was also reaffirmed that the employer could deviate from the terms and conditions of the tender if the "changes affected all intending applicants alike and were not objectionable". Therefore, deviation from the terms and conditions is permissible so long as the level playing field is maintained and it does not result in any arbitrariness or discrimination in Ramana Dayaram Shetty sense.
42. Unfortunately, this Court in Poddar Steel Corpn. v. Ganesh Engg. Works, (1991) 3 SCC 273 did not at all advert to the privilege-of-participation principle laid down in Ramana Dayaram Shetty and accepted in G.J. Fernandez. In other words, this Court did not consider whether, as a result of the deviation, others could also have become eligible to participate in the bidding process. This principle was ignored in Poddar Steel.
43. Continuing in the vein of accepting the inherent authority of an employer to deviate from the terms and conditions of an NIT, and reintroducing the privilege-of- participation principle and the level playing field concept, this Court laid emphasis on the decision-making process, particularly in respect of a commercial contract. One of the more significant cases on the subject is the three-Judge decision in Tata Cellular v. Union of India, (1994) 6 SCC 651 which gave importance to the lawfulness of a decision and not its soundness. If an administrative decision, such as a deviation in the terms of NIT is not arbitrary, irrational, unreasonable, mala fide or biased, the courts will not judicially review the decision taken. Similarly, the courts will not countenance interference with the decision at the behest of an unsuccessful bidder in respect of a technical or procedural violation. This was quite clearly stated by this Court (following Tata Cellular) in Jagdish Mandal v. State of Orissa, (2007) 14 SCC 517] in the following words: (SCC p. 531, para 22) "22. Judicial review of administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias and mala fides. 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 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."
This Court then laid down the questions that ought to be asked in such a situation. It was said: (Jagdish Mandal case, SCC p. 531, para 22) "22. ... 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."
44. On asking these questions in the present appeals, it is more than apparent that the decision taken by CCL to adhere to the terms and conditions of NIT and the GTC wascertainly not irrational in any manner whatsoever or intended to favour anyone. The decision was lawful and not unsound.
47. The result of this discussion is that the issue of the acceptance or rejection of a bid or a bidder should be looked at not only from the point of view of the unsuccessful party but also from the point of view of the employer. As held in Ramana Dayaram Shetty the terms of NIT cannot be ignored as being redundant or superfluous. They must be given a meaning and the necessary significance. As pointed out in Tata Cellular there must be judicial restraint in interfering with administrative action. Ordinarily, the soundness of the decision taken by the employer ought not to be questioned but the decision-making process can certainly be subject to judicial review. The soundness of the decision may be questioned if it is irrational or mala fide or intended to favour someone or a decision "that no responsible authority acting reasonably and in accordance with relevant law could have reached" as held in Jagdish Mandal followed in Michigan Rubber.
48. Therefore, whether a term of NIT is essential or not is a decision taken by the employer which should be respected. Even if the term is essential, the employer has the inherent authority to deviate from it provided the deviation is made applicable to all bidders and potential bidders as held in Ramana Dayaram Shetty. However, if the term is held by the employer to be ancillary or subsidiary, even that decision should be respected. The lawfulness of that decision can be questioned on very limited grounds, as mentioned in the various decisions discussed above, but the soundness of the decision cannot be questioned, otherwise this Court would be taking over the function of the tender issuing authority, which it cannot.
49. Again, looked at from the point of view of the employer if the courts take over the decision-making function of the employer and make a distinction between essential and non-essential terms contrary to the intention of the employer and thereby rewrite the arrangement, it could lead to all sorts of problems including the one that we are grappling with. For example, the GTC that we are concerned with specifically states in Clause 15.2 that "Any bid not accompanied by an acceptable Bid Security/EMD shall be rejected by the employer as non-responsive". Surely, CCL ex facie intended this term to be mandatory, yet the High Court held that the bank guarantee in a format not prescribed by it ought to be accepted since that requirement was a non- essential term of the GTC. From the point of view of CCL, the GTC has been impermissibly rewritten by the High Court.
52. There is a wholesome principle that the courts have been following for a very long time and which was articulated in Nazir Ahmad v. King Emperor, AIR 1936 PC 253 (2), namely:
"... where a power is given to do a certain thing in a certain way the thing must be done in that way or not at all. Other methods of performance are necessarily forbidden."
There is no valid reason to give up this salutary principle or not to apply it mutatis mutandis to bid documents. This principle deserves to be applied in contractual disputes, particularly in commercial contracts or bids leading up to commercial contracts, where there is stiff competition. It must follow from the application of the principle laid down in Nazir Ahmad that if the employer prescribes a particular format of the bank guarantee to be furnished, then a bidder ought to submit the bank guarantee in that particular format only and not in any other format. However, as mentioned above, there is no inflexibility in this regard and an employer could deviate from the terms of the bid document but only within the parameters mentioned above.
55. On the basis of the available case law, we are of the view that since CCL had not relaxed or deviated from the requirement of furnishing a bank guarantee in the prescribed format, insofar as the present appeals are concerned every bidder was obliged to adhere to the prescribed format of the bank guarantee. Consequently, the failure of JVC to furnish the bank guarantee in the prescribed format was sufficient reason for CCL to reject its bid.
56. There is nothing to indicate that the process by which the decision was taken by CCL that the bank guarantee furnished by JVC ought to be rejected was flawed in any manner whatsoever. Similarly, there is nothing to indicate that the decision taken by CCL to reject the bank guarantee furnished by JVC and to adhere to the requirements of NIT and the GTC was arbitrary or unreasonable or perverse in any manner whatsoever."
28. In M/s. Agmatel India Pvt. Ltd. vs. M/s. Resoursys Telecom And Others reported in AIR (2022) SC 1103, the Hon'ble Supreme Court in paragraph nos. 16 and 17 has observed as under :-
"16. The scope of judicial review in contractual matters, and particularly in relation to the process of interpretation of tender document, has been the subject matter of discussion in various decisions of this Court. We need not multiply the authorities on the subject, as suffice it would be refer to the 3-Judge Bench decision of this Court in Galaxy Transport Agency (supra) wherein, among others, the said decision in Afcons Infrastructure Limited (supra) has also been considered; and this Court has disapproved the interference by the High Court in the interpretation by the tender inviting authority of the eligibility term relating to the category of vehicles required to be held by the bidders, in the tender floated for supply of vehicles for the carriage of troops and equipment. This Court referred to various decisions on the subject and stated the legal principles as follows: -
"14. In a series of judgments, this Court has held that the authority that authors the tender document is the best person to understand and appreciate its requirements, and thus, its interpretation should not be second-guessed by a court in judicial review proceedings. In Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corporation Ltd., (2016) 16 SCC 818, this Court held:
"15. We may add that the owner or the employer of a project, having authored the tender documents, is the best person to understand and appreciate its requirements and interpret its documents. The constitutional courts must defer to this 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." (page 825) (emphasis supplied)
15. In the judgment in Bharat Coking Coal Ltd. v. AMR Dev Prabha 2020 SCC OnLine SC 335, under the heading "Deference to authority's interpretation", this Court stated:
"51. Lastly, we deem it necessary to deal with another fundamental problem. It is obvious that Respondent No. 1 seeks to only enforce terms of the NIT. Inherent in such exercise is interpretation of contractual terms. However, it must be noted that judicial interpretation of contracts in the sphere of commerce stands on a distinct footing than while interpreting statutes.
52. In the present facts, it is clear that BCCL and India have laid recourse to Clauses of the NIT, whether it be to justify condonation of delay of Respondent No. 6 in submitting performance bank guarantees or their decision to resume auction on grounds of technical failure. BCCL having authored these documents, is better placed to appreciate their requirements and interpret them. (Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corporation Ltd., (2016) 16 SCC 818): (AIR 2016 SC 4305)
53. The High Court ought to have deferred to this understanding, unless it was patently perverse or mala fide. Given how BCCL's interpretation of these clauses was plausible and not absurd, solely differences in opinion of contractual interpretation ought not to have been grounds for the High Court to come to a finding that the appellant committed illegality." (emphasis supplied)
16. Further, in the recent judgment in Silppi Constructions Contractors v. Union of India, 2019 SCC OnLine SC 1133, this Court held as follows:
"20. The essence of the law laid down in the judgments referred to above is the exercise of restraint and caution; the need for overwhelming public interest to justify judicial intervention in matters of contract involving the state instrumentalities; the courts should give way to the opinion of the experts unless the decision is totally arbitrary or unreasonable; the court does not sit like a court of appeal over the appropriate authority; the court must realise that the authority floating the tender is the best judge of its requirements and, therefore, the court's interference should be minimal. The authority which floats the contract or tender, and has authored the tender documents is the best judge as to how the documents have to be interpreted. If two interpretations are possible then the interpretation of the author must be accepted. The courts will only interfere to prevent arbitrariness, irrationality, bias, mala fides or perversity. With this approach in mind we shall deal with the present case." (emphasis supplied)
17. In accordance with these judgments and noting that the interpretation of the tendering authority in this case cannot be said to be a perverse one, the Division Bench ought not to have interfered with it by giving its own interpretation and not giving proper credence to the word "both" appearing in Condition No. 31 of the N.I.T. For this reason, the Division Bench's conclusion that JK Roadways was wrongly declared to be ineligible, is set aside.
18. Insofar as Condition No. 27 of the N.I.T. prescribing work experience of at least 5 years of not less than the value of Rs. 2 crores is concerned, suffice it to say that the expert body, being the Tender Opening Committee, consisting of four members, clearly found that this eligibility condition had been satisfied by the Appellant before us. Without therefore going into the assessment of the documents that have been supplied to this Court, it is well settled that unless arbitrariness or mala fide on the part of the tendering authority is alleged, the expert evaluation of a particular tender, particularly when it comes to technical evaluation, is not to be second-guessed by a writ court. Thus, in Jagdish Mandal v. State of Orissa, (2007) 14 SCC 517, this Court noted:
"22. Judicial review of administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias and mala fides. 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 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 blacklisting 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." (pages 531-532) (emphasis supplied)
19. Similarly, in Montecarlo Ltd. v. NTPC Ltd., (2016) 15 SCC 272, this Court stated as follows:
"26. We respectfully concur with the aforesaid statement of law. We have reasons to do so. In the present scenario, tenders are floated and offers are invited for highly complex technical subjects. It requires understanding and appreciation of the nature of work and the purpose it is going to serve. It is common knowledge in the competitive commercial field that technical bids pursuant to the notice inviting tenders are scrutinised by the technical experts and sometimes third-party assistance from those unconnected with the owner's organisation is taken. This ensures objectivity. Bidder's expertise and technical capability and capacity must be assessed by the experts. In the matters of financial assessment, consultants are appointed. It is because to check and ascertain that technical ability and the financial feasibility have sanguinity and are workable and realistic. There is a multi-prong complex approach; highly technical in nature. The tenders where public largesse is put to auction stand on a different compartment. Tender with which we are concerned, is not comparable to any scheme for allotment. This arena which we have referred requires technical expertise. Parameters applied are different. Its aim is to achieve high degree of perfection in execution and adherence to the time schedule. But, that does not mean, these tenders will escape scrutiny of judicial review. Exercise of power of judicial review would be called for if the approach is arbitrary or mala fide or procedure adopted is meant to favour one. The decision-making process should clearly show that the said maladies are kept at bay. But where a decision is taken that is manifestly in consonance with the language of the tender document or subserves the purpose for which the tender is floated, the court should follow the principle of restraint. Technical evaluation or comparison by the court would be impermissible. The principle that is applied to scan and understand an ordinary instrument relatable to contract in other spheres has to be treated differently than interpreting and appreciating tender documents relating to technical works and projects requiring special skills. The owner should be allowed to carry out the purpose and there has to be allowance of free play in the joints." (page 288)
20. This being the case, we are unable to fathom how the Division Bench, on its own appraisal, arrived at the conclusion that the Appellant held work experience of only 1 year, substituting the appraisal of the expert four- member Tender Opening Committee with its own."
(Underlining emphasis in the original; emphasis in bold supplied)
17. The above-mentioned statements of law make it amply clear that the author of the tender document is taken to be the best person to understand and appreciate its requirements; and if its interpretation is manifestly in consonance with the language of the tender document or subserving the purchase of the tender, the Court would prefer to keep restraint. Further to that, the technical evaluation or comparison by the Court is impermissible; and even if the interpretation given to the tender document by the person inviting offers is not as such acceptable to the Constitutional Court, that, by itself, would not be a reason for interfering with the interpretation given.
Application of relevant principles to the case at hand
29. Applying the judgments of the Hon'ble Apex Court as extracted, this Court finds that in the matter of a policy decision so taken by the tender issuing authorities, a judicial restrain is to be resorted to and merely because certain terms and conditions seems to be not suitable to a particular party cannot be a ground to hold it illegal, arbitrary or in violation of Article 19 of the Constitution of India.
30. The present case cannot also be analysed from another point of angle that in case sub-clause (1) and sub-clause (4) of Clause 9-A of the tender in question is struck down then it will create havoc and undesired result as it will tantamount to give gateway to those intending parties who are not only defaulter but also chronic litigants having litigation with the entities who have floated tenders which would further tantamount to putting something in the mouth which is not liable to be eaten or swallowed.
31. So far as the argument of Sri Shashi Nandan, learned Senior Counsel in relation to the fact that there is no dispute of payment of royalty and GST and same cannot exclude the petitioner from coming into the zone of consideration is concerned, this Court is unable to accept the said proposition as dispute arise only when there is a disagreement between two as defined in the various dictionaries which are often being used for reference. The dictionary meaning of the word ''dispute' is as under:-
"Black's Law Dictionary, 5th edition, page 424 defines ''dispute' as under:
"to argue about, to contend ... words; an argument; a debate; a quarrel".
Cambridge Dictionary defines ''dispute' as under:
"a disagreement or argument between two people, groups or countries."
Collins' Dictionary defines ''dispute' as under:
"A dispute is an argument or disagreement between people or groups."
32. This Court finds that there exists not only a serious dispute but also demand has raised by the second respondent with respect to unpaid royalty and GST.
33. Sri Shashi Nandan who appears for the petitioners has relied upon the judgment in the case of Monark Infrastructure (P) Ltd. vs. Commercial Ullas Nagar Municipality & Ors. reported in AIR (2000) SC 2272 so as to contend that this Court can interfere with the policy of the Government in the matter of contract / tender when the same is arbitrary or unreasonable.
34. There is no quarrel to the proposition of law so propounded by the Hon'ble Supreme Court as argued by learned Senior Counsel, however, this Court while applying the judgments so relied upon by the learned Senior Counsel has to analyse the facts of the present case so as to form the opinion in that regard. This court finds that the conditions embodied under Sub-clause 1 and Sub-clause 4 of Clause 9 (A) are no where violative of the Article 19 of the Constitution of India.
35. After giving anxious consideration to the submission of the respective parties, this Court finds its inability to subscribe to the argument of the learned Senior Counsel who appears for the petitioner as according to the firm opinion of the Court, the best suited authority to incorporate the terms and the conditions of the contract / tender are framers of the tender and further the Clause 9 sub-clause (1) and sub-clause (4) of Clause 9-A of the tender dated 21.4.2022 does not suffer from any infirmity or illegality and the same is confirmity and consonance under Article 19 of the Constitution of India.
36. Resultantly, the present writ petition is wholly misconceived and is liable to be dismissed.
37. Accordingly, it is dismissed.
38. Cost made easy."
7. Sri Kunal Ravi Singh, learned counsel for the petitioner has not disputed the legal and factual position that the challenge so raised in Writ -C No.13077 of 2022 (Ravi Offset Printers and Publishers Pvt. Ltd. vs. State of U.P. and Others) was with regard to offending provisions contained under sub clause 1 and 4 of clause 9(A) of the e-tender dated 21.04.2022 and the said provisions are paramateria to the provisions which are under challenged in the present writ petition being sub-clause 1 and 4 of clause 9(A) of the e-tender dated 12.05.2022.
8. Sri Kunal Ravi Singh has further also not disputed the fact that all the legal submissions which he is seeking to raise have been elaborately dealt with in the judgement and order dated 11.05.2022 passed in Writ -C No.13077 of 2022 (Ravi Offset Printers and Publishers Pvt. Ltd. vs. State of U.P. and Others) which in fact was a petition instituted by the present petitioner wherein challenge was raised to sub-clause 1 and 4 of clause 9(A) of the e-tender dated 21.04.2022.
9. More so, Sri Kunal Ravi Singh, learned counsel for the petitioner has made a statement at bar that barring the difference in the date of e-tender the offending conditions are same and even the facts originating the filing of the writ petition are also same.
10. Sri Kunal Ravi Singh has further made a statement at bar that the e-tender dated 21.04.2022 has not been given a logical end as the respondent therein has withdrawn the e-tender dated 21.04.2022 which was subject matter of the challenge in Writ Petition No.13077 of 2022 (Ravi Offset Printers and Publishers Pvt. Ltd. vs. State of U.P. and Others).
11. Sri Ved Prakash Mishra, learned Standing Counsel has made a statement at bar that the controversy so involved in the present writ petition has already been dealt with in Writ -C No.13077 of 2022 (Ravi Offset Printers and Publishers Pvt. Ltd. vs. State of U.P. and Others) when there is only difference is that in place of e-tender dated 21.04.2022 the present writ petition is relating to e-tender dated 12.05.2022.
12. Considering the submissions so raised by the rival parties, the present writ petition is being decided in terms of the judgement and order dated 11.05.2022 passed in Writ -C No.13077 of 2022 (Ravi Offset Printers and Publishers Pvt. Ltd. vs. State of U.P. and Others).
13. Resultantly, the present petition is liable to be dismissed and is accordingly dismissed.
14. No order as to costs.
Order Date :- 25.05.2022 Nitendra