Uttarakhand High Court
Trans Bharat Aviation Private Limited vs State Of Uttarakhand And Others on 11 September, 2019
Equivalent citations: AIRONLINE 2019 UTR 458
Author: Manoj K. Tiwari
Bench: Manoj K. Tiwari
Reserved on 23.08.2019
Delivered on 11.09.2019
IN THE HIGH COURT OF UTTARAKHAND AT NAINITAL
Writ Petition (M/S) No. 1575 of 2019
Trans Bharat Aviation Private Limited. .......Petitioner
Versus
State of Uttarakhand and others ....Respondents
Mr. B.C. Pande, Senior Advocate, assisted by Mr. Shikhar Kacker, Advocate for the
petitioner.
Mr. Paresh Tripathi, Chief Standing Counsel for the State of Uttarakhand.
Mr. Alok Mahra, Advocate for respondent no. 2.
Mr. Rakesh Thapliyal, Senior Advocate, assisted by Mr. Pankaj Chaturvedi, Advocate for
respondent nos. 3 & 4.
Dated: 11.09.2019
Hon'ble Manoj K. Tiwari, J. (Oral)
By means of this writ petition under Article 226 of the Constitution of India, petitioner has sought the following reliefs:-
"I. to issue a writ(s)/ order(s)/direction(s) quashing the allotment of tender with respect to 'Guptkashi- Kedarnath' route for operating helicopter services pursuant to the RFP dated 5/2/20019;
II. to issue a writ(s) in the nature of mandamus or any other writ(s)/ order(s)/ direction(s) directing the Respondents to reconsider the technical eligibility of Petitioner to bid for the tender and allot tender to the Petitioner, subject to satisfying the financial bid requirements."
2. Facts of the case, in brief are as follows:-
Uttarakhand Civil Aviation Development Authority (respondent no. 2) invited bids in two bid system for award of contract for providing helicopter shuttle service on the following routes in State of Uttarakhand:-
(i) Guptakashi-Kedarnath.
(ii) Phata-Kedarnath.
2
(iii) Sirsi-Kedarnath.
(iv) Kedarnath-Badrinath.
(v) Govindghant-Ghngaria.
3. Petitioner, which is a Company engaged in the business of carrying on Non Scheduled Air Operations, submitted bid in response to the notice inviting tender issued by respondent no. 2. Total 11 bids were received including that of the petitioner. The bids were opened on 10.05.2019 and the bid submitted by two bidders, namely, petitioner and Dhillan Aviation Pvt. Ltd. were rejected as technically non responsive and contract was awarded to other successful bidders. Thus, feeling aggrieved, petitioner has approached this Court seeking quashing of award of contract with respect to Guptkashi-Kedarnath route and to re-consider his technical eligibility to bid for the tender and to award contract to him, subject to his satisfying financial bid requirements.
4. According to Mr. B.C. Pande, learned Senior Counsel, petitioner was an existing operator in Guptkashi-
Kedarnath route and he operated helicopter services for the year 2018 to the satisfaction of authorities concerned and respondent no. 2 had also issued NOC to him. He further submits that, as per the summary report generated on the online portal of the e-procurement system of Government of Uttarakhand, the status of petitioner's bid submission as on 09.05.2019 was shown as "accepted and fee/pre-qualification/technically", however on 10.05.2019, at about 03:45 p.m. Petitioner learnt through an auto generated e-mail sent by respondent no. 2 that his bid has been rejected as "technically non responsive". He further submits that no reason for rejecting his technical bid was assigned to the 3 petitioner despite repeated requests, which resulted in denial of opportunity to him to provide clarification or cure any defect in order to participate in the financial bid. It is further submitted that the financial bids were opened physically in gross violation of the rules, which permit only e-opening of the e-tender. It is further submitted that some of the successful bidders do not fulfill the technical eligibility criteria laid down in the bid document. It is further submitted that one Mr. Satyendra Rawat, Quality Controller in UCADA (respondent no. 2) could not have evaluated the bid of the petitioner, as he was earlier an employee of one of the successful bidder, namely, Arrow Aircraft Sales and Charters Pvt. Ltd. and had joined UCADA as a contractual employee two days prior to the evaluation of the technical bid. It is further stated that petitioner fulfills all the eligibility criteria and he was wrongly disqualified in order to favour other bidders.
5. Separate counter affidavits have been filed by the respondents. Respondent no. 2 in paragraph no. 3 of his counter affidavit has given reasons for declaring petitioner's technical bid as non responsive, which are as follows:-
(i) Petitioner had not submitted bid security in the form as prescribed in Appendix-6 of the bid document.
(ii) Petitioner had submitted scanned copy of bank draft in respect of the Tender Fees and Earnest Money Deposit (EMD) and the original draft was not submitted alongwith Key Submissions and Qualification Information as per Clause-2.17 of the bid document.
(iii) Power of Attorney enclosed alongwith the bid document was not notarized and as such 4 was not in accordance with the procedure laid down by the applicable law, as it was not duly executed.
(iv) Petitioner had enclosed his financial bid alongwith Key Submissions and Qualification Information in complete violation of Clause-
2.17.1 of the bid document.
6. Paragraph no. 8 of the counter affidavit filed by respondent no. 2 further elaborates the reasons for declaring petitioner's bid a non responsive, which is reproduced below:-
"8. That the contents of para 8 of the writ petition as stated are erroneous misleading hence denied. In reply it is submitted that the respondent no. 2 only grants permission for operating heli shuttle services and does not grant licenses. It is further submitted that along with online submissions of the bid, bidders were also required to submit Key submissions and Qualification Information (Part-I) and Financial Bid (Part-II) in separate envelopes, duly marking the envelopes as specified in Clause-2.17.1 of the bid document. As submitted above petitioner's technical bid was declared non responsive as he has enclosed his financial bid along with Key Submissions and Qualification Information. The petitioner's technical bid was declared non responsive as he has not submitted the bid security in the form as prescribed in Appendix-6 of the bid document, but, instead have furnished scanned copy of bank draft for tender fee and EMD of which he has not submitted the original copy of the bank draft as required under Key Submission and Qualification Information. Furthermore, petitioner has submitted his financial bid in the same envelope containing the Key Submission and Qualification Information, which was a gross violation as per Clause 2.17.1 of the bid document."5
7. Learned counsel for the respondent no. 2 submits that evaluation of technical bids was done on 09.05.2019 and 10.05.2019 and financial bids of those, who qualified in the technical bid, were opened thereafter on 10.05.2019. He further submits that the documents enclosed with the technical bids were closely scrutinized on 10.05.2019 and it was found that technical bid submitted by petitioner & Dhillon Aviation Pvt. Ltd. were not in conformity with the terms and condition mentioned in the bid document, accordingly, their technical bids were rejected. He further submits that the documents enclosed with the technical bids were checked cursorily on 09.05.2019 and they were subjected to close scrutiny on 10.05.2019.
8. Learned counsel for respondent no. 2 refers to clause 2.14.1 of the bid document, which provides that failure to comply with the requirements of bid document will be at bidders own risk. He submits that since petitioner's bid was not inconformity with the conditions of bid document, therefore, the same was rightly rejected. He further submits that in contractual matters, a government agency must have reasonable play in its joints and greater latitude is required to be conceded to it as held by Hon'ble Supreme Court in various judgments. He further submits that respondent no. 2 was under no obligation to assign reason for rejection of bid in the absence of any such condition in the bid document.
9. Regarding physical opening of financial bid, learned counsel for respondent no. 2 submits that the technical bids were opened electronically, but the online opening of the financial bid could not be initiated due to a technical fault in the Digital Signature Certificate (DSC) 6 used for the purpose of e-tendering. He further submits that immediately after encountering this difficulty, the tender committee, in the presence of the bidders, made all possible efforts to correct this technical fault through the IT expert, who was present to provide technical expertise to the tender committee. After exhausting all possible efforts to fix the problem, the tender committee in the interest of expediting early start of heli services for pilgrims, thought it prudent to go ahead with the physical opening of the financial bid document after obtaining a certificate from the IT expert which was duly countersigned by the Finance Controller of UCADA. He further submits that to maintain transparency and accountability, the tender committee obtained NOC from all the bidders whose bids were found responsive. He further submits that since petitioner's technical bid was rejected which rendered him ineligible to participate in the financial bid, therefore, he has no locus to raise the issue of physical opening of financial bids.
10. Regarding the issue of lack of technical qualification of some of the successful bidders, learned counsel for the respondent no. 2 submits that all the successful bidders fulfill all conditions of eligibility and they were declared successful after due scrutiny of their documents. Learned counsel for respondent no. 2 further submits that the bidders who, according to the petitioner, are not technically qualified, are not party to the writ petition, therefore, petitioner cannot be permitted to raise any contention against their eligibility behind their back.
11. Learned counsel for respondent no. 2 further submits that Mr. Satyendra Rawat was not a member of Tender Evaluation Committee, therefore he had no role in 7 the process of evaluation of bids. He further submits that since the documents enclosed with petitioner's bid were not as per the bid document and he had not enclosed the bid security and had enclosed only scanned copy of the bank draft with his technical bid, therefore petitioner's bid was rightly declared as non responsive.
12. Clause 2.1.3 of the bid document provides that if the bidder is a proprietorship firm or a partnership firm, it should submit a power of attorney as per the format enclosed in Appendix 3A authorizing the signatory of the bid to commit the bidder.
13. In Appendix 3A to the bid document, format of the power of attorney is given and in the Note appended to Appendix 3A it is provided that "mode of execution of the power of attorney should be in accordance with the procedure, if any, laid down by the applicable law and charter documents of the executant (s) and when it is so required the same should be under common seal affixed in accordance with the required procedure".
14. According to respondent no. 2, since the power of attorney enclosed with the bid of the petitioner was not notarized, therefore it was not in accordance with the procedure laid down by the applicable law, therefore it was unacceptable.
15. Learned counsel for the petitioner, by relying upon an order passed by Delhi High Court in the case of Grafitek International v. Mr. K. Kaura & others reported in I.L.R. (2002) 1 Delhi, submits that notarization of a power of attorney is not necessary and a power of attorney is 8 valid even without notarization Relevant extract of the said order is reproduced below:-
"In the instant case, the crucial question that requires to be determined is whether Mr. Ravi K. Maggon has been authorized to file and institute the suit or not. The very fact that action of Mr. Ravi Maggon were ratified by way of fresh power of attorney which was duly notarized shows that the earlier power of attorney was in order but for its notarization.
Merely because the power of attorney is not duly notarized does not mean that the concerned person was not authorized to institute the suit. Notarization raises presumption as to its authentication and no more. Notarisation of power of attorney is a matter of procedure and raises the presumption of authority of the person to institute the suit. In other words it does not mean that power of attorney executed in favour of a particular person but not duly notarized does not confer power upon the person to institute the suit. The objection taken by the learned counsel is that the said power of attorney does not bear any authentication by a Notary Public and therefore Mr. Maggon had no authority to file the present suit and as a consequence such a suit was never properly instituted.
The importance of power of attorney without notarization cannot be undermined but at the same time if such a defect is removed subsequently during the pendency of the suit and that too is followed by ratification of the authority of a person who has been authorized to institute the suit, it is not such a fatal infirmity that would hit at the maintainability of the suit itself."
16. The aforesaid order passed by Delhi High Court is distinguishable on facts. In that case, the Court was dealing with a case where civil suit was filed by the power of attorney holder on behalf of the plaintiff. The power of attorney was not notarized but subsequently the plaintiff executed another power of attorney, which was duly 9 notarized, therefore Hon'ble Delhi High Court held that action of the power of attorney holder of filing the suit was ratified by the plaintiff. In view of the subsequent ratification through a notarized power of attorney, it was held that the suit is maintainable.
17. The aforesaid order is no help to the petitioner. In case of a civil suit filed by a power of attorney holder, the principal can ratify the act of his agent subsequently through duly notarized power of attorney. In contractual matters, where eligibility of a bidder is to be seen with reference to the documents submitted with his technical bid, there is no possibility of subsequent ratification through a fresh notarized power of attorney. If submission of a power of attorney, executed in accordance with the procedure laid down by the applicable law, is one of the condition of eligibility, then every bidder must be careful to submit a power of attorney, which meets the requirement of the bid document.
18. Even otherwise, the interpretation given by the employer to the tender document has to be respected and this Court, while exercising power of judicial review, cannot go into the question of correctness of the interpretation unless there is malafide or perversity in the understanding or in the application of the terms of the tender condition.
19. Hon'ble Supreme Court in the case of Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corporation Ltd. & another reported in (2016) 16 SCC 818 has held as under.
"15. We may add that the owner or the employer of a project, having authored the 10 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."
20. Another ground for rejection of petitioners' technical bid is that he had not submitted the bid security in the form as prescribed in Appendix-6 of the bid document and further that petitioner had submitted only scanned copy of bank draft in respect of tender fee and earnest money deposit and original drafts were not submitted with his technical bid. Clause 2.11.1 of the bid document specifically provides that bids should be accompanied by a bid security of Rs. 5,00,000/-, which can be in the form of an irrevocable bank guarantee or in the form of Bank Draft in favour of respondent no. 2.
21. Learned counsel for the petitioner submits that since petitioner had got a Bank Draft prepared, therefore, he will not keep the bank draft with himself and submit scanned copy thereof alongwith his technical bid. Thus, he submits that there is some foul play in the matter, as he had enclosed original Bank Draft with his bid. However, the writ petition is absolutely silent on the aspect of foul play and there is no reason to disbelieve the stand taken by respondent no. 2. There is no allegation of malafide against any individual and no one has been impleaded as respondent in personal capacity. Thus, in the absence of any clinching evidence regarding submission of Bank 11 Draft in original, the contention made by learned counsel for the petitioner cannot be accepted.
22. Another ground of rejection of technical bid of the petitioner is that he had submitted his technical bid (key submissions and qualification information) in the envelop containing financial bid. This is contrary to clause 2.17.1 of the bid document, which is extracted below:-
"2.17.1 The Bidder shall seal the Key Submissions and Qualification Information (Part I) and the Financial Bid (Part II) in separate envelopes, duly marking the envelopes as "KEY SUBMISSIONS & QUALIFICATION INFORMATION" and "FINANCIAL BID". The first two Parts shall then be sealed in an outer envelope duly marked as "OTHER SUBMISSIONS". These envelopes shall then be sealed in an outer envelope."
23. According to the petitioner, respondent no. 2 opened hard copy of the financial bid, while it was to be opened electronically, therefore, the entire process is vitiated on this score alone.
24. Defense taken by respondent no. 2 is that, due to technical fault, the financial bid could not be opened electronically. It is further submitted that since the tender process was already delayed by one and half months and the Yatra Season had begun, therefore with a view to avoid further delay in start of heli services for pilgrims, it was decided to physically open the financial bid document after obtaining certificate for the IT experts, which was duly countersigned by the Finance Controller of UCADA. It is further submitted that all the bidders, whose technical bids were declared as responsive were informed about this decision and once they agreed, then financial bid was opened physically.
25. The certificate given by I.T. Experts has been brought on record as Annexure No. CA-1 to the counter 12 affidavit of respondent no. 2, where he has certified that, due to technical issues in one of the digital signature certificate (out of two bid opener), the financial e-bid of Shri Kedarnath Ji and Shri Hemkund Sahib could not be opened. The said certificate is countersigned by Finance Controller UCADA.
26. The undertaking/N.O.C. given by responsive bidders before physical opening of financial bids is on record as Annexure No. CA-2, in which they have consented to physical opening of financial bid. In the said undertaking, it has been stated that, in the event of opening of financial e-bid documents on a later date, if there is difference in the value of bid amount between financial e-bid document and the bid document mentioned in the hard copy, the amount mentioned in the e-bid document would be treated as final. Respondent no. 2, in his counter affidavit, has stated that the technical fault could not be rectified, therefore, the financial e-bid document could not be opened.
27. Physical opening of financial bid is one of the principal ground of challenge in the writ petition. Respondent no. 2 has given valid justification for its decision to open the hard copy of financial bid. What prejudice was caused to the petitioner by the said decision has not been spelt out in the writ petition. During arguments also, learned Senior Counsel for the petitioner could not demonstrate prejudice, if any, caused to the petitioner by the said decision. Even otherwise also, after declaration of his technical bid as non responsive, petitioner was no more in the fray, therefore, his locus to raise this issue is also doubtful. I find that physical opening of the financial bids is not such an illegality which 13 may vitiate the entire process. In other words, respondent no. 2 was justified in resorting to physical opening of financial bids, in the facts and circumstances of the case.
28. Another principal ground of challenge raised by the petitioner is participation by Mr. Satyendra Rawat Quality Controller, UCADA in the evaluation of bids. According to him, Mr. Rawat earlier served with Arrow Aircraft Sales and Charters Private Limited and he was engaged in UCADA as Quality Controller on contract just two days before evaluation of the bids. Thus, according to the petitioner, there was a conflict of interest, therefore, the entire process is vitiated due to participation of Mr. Rawat in the process of evaluation of bids. The stand taken by respondent no. 2 is that Mr. Rawat was not a Member of Tender Evaluation Committee and he never participated in the process of evaluation of bids. No material has been found on record by the petitioner to show that Mr. Rawat, in fact, did participate in the process. Even otherwise also, it cannot be said with certainty in every case that an employee, after accepting employment under a new employer, will still be loyal to his earlier employer and not to the new employer. Moreover, as per own admission of the petitioner, Mr. Rawat had joined just two days before the opening of the bids in UCADA, that too as a contract employee. Whether a contract employee can wield such clout in the new organization within two days of his joining so as to influence the decision making process is also not believable. Thus, this Court finds no force in this ground of challenge also.
29. Hon'ble Supreme Court in the case of Tata Cellular Vs. Union of India, reported in (1994) 6 SCC 651, 14 has considered the scope of judicial review in contractual matters of the Government. Paragraph No.70 of the said judgment is extracted below:
"70. It cannot be denied that the principles of judicial review would apply to the exercise of contractual powers by Government bodies in order to prevent arbitrariness or favouritism. However, it must be clearly stated that there are inherent limitations in exercise of that power of judicial review. Government is the guardian of the finances of the State. It is expected to protect the financial interest of the State. The right to refuse the lowest or any other tender is always available to the Government. But, the principles laid down in Article 14 of the Constitution have to be kept in view while accepting or refusing a tender. There can be no question of infringement of Article 14 if the Government tries to get the best person or the best quotation. The right to choose cannot be considered to be an arbitrary power. Of course, if the said power is exercised for any collateral purpose the exercise of that power will be struck down."
30. Hon'ble Supreme Court in the case of Municipal Corporation, Ujjain and another Vs. BVG India Limited and others, reported in (2018) 5 SCC 462, has formulated three questions in paragraph no. 8 of the judgment, which were answered in paragraph no. 64. Paragraph nos. 8 & 64 of the judgment are extracted below:
"8. The questions involved in these appeals are:
8.1. (a) Whether under the scope of judicial review, the High Court could ordinarily question the judgment of the expert consultant on the issue of technical qualifications of a bidder when the consultant takes into consideration various factors including the basis of non- performance of the bidder?
8.2. (b) Whether a bidder who submits a bid expressly declaring that it is submitting the same independently and without any partners, consortium or joint venture can rely upon the 15 technical qualifications of any third party for its qualification?
8.3. (c) Whether the High Court is justified in independently evaluating the technical bids and financial bids of the parties, as an appellate authority, for coming to the conclusion?"
"64. Thus, the questions to be decided in this appeal are answered as follows:
64.1. Under the scope of judicial review, the High Court could not ordinarily interfere with the judgment of the expert consultant on the issues of technical qualifications of a bidder when the consultant takes into consideration various factors including the basis of non- performance of the bidder;
64.2. A bidder who submits a bid expressly declaring that it is submitting the same independently and without any partners, consortium or joint venture, cannot rely upon the technical qualifications of any third party for its qualification.
64.3. It is not open to the court to independently evaluate the technical bids and financial bids of the parties as an appellate authority for coming to its conclusion inasmuch as unless the thresholds of mala fides, intention to favour someone or bias, arbitrariness, irrationality or perversity are met, where a decision is taken purely on public interest, the court ordinarily should exercise judicial restraint."
31. In the case of Manohar Lal Sharma Vs. Narendra Damodardas Modi and others, reported in (2019) 3 SCC 25, Hon'ble Supreme Court has summarized the law regarding parameters of judicial review in contractual matters of the State. Paragraph no.7 of the said judgment is reproduced below:
"7. Parameters of judicial review of administrative decisions with regard to award of tenders and contracts has really developed from the increased participation of the State in commercial and economic activity. In Jagdish Mandal v. State of Orissa this Court, conscious of the limitations in commercial transactions, 16 confined its scrutiny to the decision-making process and on the parameters of unreasonableness and mala fides. In fact, the Court held that it was not to exercise the power of judicial review even if a procedural error is committed to the prejudice of the tenderer since private interests cannot be protected while exercising such judicial review. The award of contract, being essentially a commercial transaction, has to be determined on the basis of considerations that are relevant to such commercial decisions, and this implies that terms subject to which tenders are invited are not open to judicial scrutiny unless it is found that the same have been tailor-made to benefit any particular tenderer or a class of tenderers."
32. Similarly, in the case of Consortium of Titagarh Firema Adler S.P.A. -Titagarh Wagons Ltd. Vs. Nagpur Metro Rail Corporation Ltd., reported in (2017) 7 SCC 486, has held as under:
"30. Before we proceed to deal with the concept of single entity and the discretion used by the 1st respondent, we intend to deal with role of the court when the eligibility criteria is required to be scanned and perceived by the court. In Montecarlo Ltd, the Court referred to Tata Cellular wherein certain principles, namely, the modern trend pointing to judicial restraint on administrative action; the role of the court is only to review the manner in which the decision has been taken; the lack of expertise on the part of the court to correct the administrative decision; the conferment of freedom of contract on the government which recognises a fair play in the joints as a necessary concomitant for an administrative body functioning in an administrative sphere or quasi-administrative sphere, were laid down. It was also stated in the said case that the administrative decision must not only be tested by the application of Wednesbury principle of reasonableness but also must be free from arbitrariness not affected by bias or actuated by mala fides. The two- Judge Bench took note of the fact that in Jagdish Mandal it has been held that, (SCC p. 531, para 22) if the decision relating to award of contract is bona fide and is in public interest, 17 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 decisions in Master Marine Services (P) Ltd. v. Metcalfe & Hodgkinson (P) Ltd., B.S.N. Joshi & Sons Ltd. v. Nair Coal Services Ltd. and Michigan Rubber (India) Ltd. have been referred to. The Court quoted a passage from Afcons Infrastructure Ltd. wherein the principle that interpretation placed to appreciate the tender requirements and to interpret the documents by owner or employer unless mala fide or perverse in understanding or appreciation is reflected, the constitutional courts should not interfere. It has also been observed in the said case that 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. After referring to the said authority, it has been ruled thus:
"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 18 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."
31. In T.N. Generation and Distribution Corpn. Ltd. v. CSEPDI--Trishe Consortium, the Court, after referring to Jagdish Mandal and taking note of the complex fiscal evaluation and other aspects, held:
"36. ... At this juncture we are obliged to say that in a complex fiscal evaluation the Court has to apply the doctrine of restraint. Several aspects, clauses, contingencies, etc. have to be factored. These calculations are best left to experts and those who have knowledge and skills in the field. The financial computation involved, the capacity and efficiency of the bidder and the perception of feasibility of completion of the project have to be left to 19 the wisdom of the financial experts and consultants. The courts cannot really enter into the said realm in exercise of power of judicial review. We cannot sit in appeal over the financial consultant's assessment. Suffice it to say, it is neither ex facie erroneous nor can we perceive as flawed for being perverse or absurd."
32. In Reliance Telecom Ltd. v. Union of India, the Court referred to the authority in Asia Foundation & Construction Ltd. v. Trafalgar House Construction (I) Ltd. wherein it has been observed that: (Reliance Telecom Ltd. case, SCC p. 317, para 58) "58. ... though the principle of judicial review cannot be denied so far as exercise of contractual powers of government bodies is concerned, but it is intended to prevent arbitrariness or favouritism and it is exercised in the larger public interest or if it is brought to the notice of the Court that in the matter of award of a contract power has been exercised for any collateral purpose."
Thereafter, the Court in Reliance Telecom Ltd. proceeded to state thus: (SCC p. 317, para 58) "58. ... In the instant case, we are unable to perceive any arbitrariness or favouritism or exercise of power for any collateral purpose in NIA. In the absence of the same, to exercise the power of judicial review is not warranted. In the case at hand, we think, it is a prudent decision once there is increase of revenue and expansion of the range of service."
And again: (SCC p. 317, para 59) "59. It needs to be stressed that in the matters relating to complex auction procedure having enormous financial ramification, interference by the courts based upon any perception which is thought to be wise or assumed to be fair can lead to a situation which is not 20 warrantable and may have unforeseen adverse impact. It may have the effect potentiality of creating a situation of fiscal imbalance. In our view, interference in such auction should be on the ground of stricter scrutiny when the decision-making process commencing from NIA till the end smacks of obnoxious arbitrariness or any extraneous consideration which is perceivable."
33. Similarly, in the case of JSW Infrastructure Limited and another Vs. Kakinada Seaports Limited and others, reported in (2017) 4 SCC 170, Hon'ble Supreme Court has held that, in contractual matters, the Writ Courts should not interfere unless the decision taken is totally arbitrary, perverse or malafide. Paragraph nos. 8, 9 & 10 of the said judgment are reproduced below:
"8. We may also add that the law is well settled that superior courts while exercising their power of judicial review must act with restraint while dealing with contractual matters. A three- Judge Bench of this Court in Tata Cellular v. Union of India held that:
(i) there should be judicial restraint in review of administrative action;
(ii) the court should not act like court of appeal; it cannot review the decision but can only review the decision-making process;
(iii) the court does not usually have the necessary expertise to correct such technical decisions;
(iv) the employer must have play in the joints i.e. necessary freedom to take administrative decisions within certain boundaries.
9. In Jagdish Mandal v. State of Orissa this Court held that evaluation of tenders and awarding contracts are essentially commercial functions and if the decision is bona fide and taken in the public interest the superior courts should refrain from exercising their power of 21 judicial review. In the present case there are no allegations of mala fides and the appellant consortium has offered better revenue sharing to the employer.
10. In Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corpn. Ltd.6 this Court held as follows: (SCC pp. 825-26, paras 13 & 15-16) "13. ... 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.
16. In the present appeals, although there does not appear to be any ambiguity or doubt about the interpretation given by NMRCL to the tender conditions, we are of the view that even if there was such an ambiguity or doubt, the High Court ought to have refrained from giving its own interpretation unless it had come to a clear conclusion that the interpretation given by NMRCL was perverse or mala fide or intended to favour one of the bidders. This was certainly not the case either 22 before the High Court or before this Court."
The view taken in Afcons was followed in Montecarlo Ltd. v. NTPC Ltd. Thus it is apparent that in contractual matters, the writ courts should not interfere unless the decision taken is totally arbitrary, perverse or mala fide."
34. In the case of Jagdish Mandal Vs. State of Orissa and others, reported in (2007) 14 SCC 517, Hon'ble Supreme Court has held as under:
"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 23 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."
35. In view of the legal position, as discussed above, there is no scope for interference in the matter. The reasons assigned by respondent no. 2 for declaring petitioner's technical bid as non responsive, cannot be said to be invalid, more so, when those reasons are referable to the terms and conditions of the bid document. Similarly, the decision taken by Tender Committee to open hard copy of financial bid cannot be said to be such infirmity which may vitiate the entire tender process.
36. Even otherwise also, valid explanation has been given for the decision to open hard copy of the financial bid, namely to expedite the tender process so that helicopter shuttle services may be provided to the pilgrims without further delay during current yatra season.
2437. In the absence of any material to show that Mr. Satyendra Rawat was part of the evaluation process, the tender process cannot be disturbed merely because he earlier served with one of the bidders.
38. In such view of the matter, petitioner is not entitled to the reliefs claimed in the writ petition.
39. Accordingly, the writ petition is dismissed.
40. There will be no order as to costs.
(Manoj K. Tiwari, J) 11.09.2019 Navin