Mdd Medical Systems(India) Pvt Ltd vs State Of Gujarat on 7 May, 2018

[Cites 20, Cited by 1]

Gujarat High Court

Mdd Medical Systems(India) Pvt Ltd vs State Of Gujarat on 7 May, 2018

1. By way of this petition under Article 226 of the Constitution of India, the petitioner, one of the bidders whose Page 1 of 42 C/SCA/7201/2018 JUDGMENT bid has been rejected at the technical stage on non-fulfilling the eligibility criteria, has prayed for the following reliefs:

b. be further pleased to issue a Writ, direction or order in the nature of Certiorari or any other appropriate writ, direction or order quashing and setting aside entire Notice inviting Tender being IFB/Tender Notice No. Retender 5 of 2017-18 (Tender No.282922) for supply, installation, testing and commissioning of Medical Gas Pipeline System (MGPS) works for GCRI Hospital at Civil Hospital, Asarwa, Ahmedabad dated 04.10.2017 along with technical specifications;

c. be further pleased to issue a direction to the respondents to conduct the whole Tender process afresh after amending the specification in accordance with guidelines laid down by CVC to make entire contract generic in nature with regard to supply, installation, testing and commissioning of medical Gas Pipeline System (MGPS) works for GCRI Hospital at Civil Hospital, Asarwa, Ahmedabad.

d. Issue a Writ, direction or order in the nature of Certiorari or any other appropriate writ, direction or order quashing the action of rejection of technical bid of the petitioner at Annexure 1 dated 19.04.2018....

2. The facts leading to the present Special Civil Application in nutshell are as under:-

2.1 That respondent No.2 herein, the Gujarat Cancer and Research Institute, had invited bids by Notice dated 29.06.2017, inviting the bids/ tenders for supply/ installation, testing and commissioning of Medical Gas Pipeline System (MGPS) works for GCRI Hospital at Civil Hospital, Ahmedabad.

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C/SCA/7201/2018 JUDGMENT The tender document provided for the eligibility criteria and the scope included "design, supply, installation, testing and commissioning, after sales CMC of centralized medical gas pipeline system", which inter alia included the following:

             *       Oxygen supply system
             *       Nitrous Oxide supply system
             *       Medical Compressed air system (4 Bar) on site generation
             *       Surgical Compressed air system (7 Bar) on site generation
             *       Medical Vacuum system, on site generation
             *       Carbon dioxide supply system
             *       Anesthetic gas scavenging system/ WAGD
             *       Area / Zonal valve service unit
             *       Area Alarm Panel
             *       Medical gas outlet points
             *       Pipe Distribution system
             *       Master alarm panel
             *       Bed head panels
             *       Accessories etc.

The eligibility criteria further provided that the Area Alarm Panel shall be touchscreen area alarm as HTM02-

01/NFPA 99/ISO7396-1/DIN Standard.

2.2 At this stage, it is required to be noted that prior to the invitation of the present bids, earlier tenders were invited with the same specification requirement and the same eligibility criteria in which the petitioner also participated. However, for reasons which are not forthcoming, the said tender was scrapped and fresh tenders were invited.

2.3 A pre-bid meeting was held in which the petitioner also remained present. A grievance was raised by the petitioner against the eligibility criteria/ requirement of touchscreen area Page 3 of 42 C/SCA/7201/2018 JUDGMENT alarm. It is the case on behalf of the petitioner that touchscreen area alarm is not required. It is also further the case on behalf of the petitioner that the requirement that the area alarm should be touchscreen is a Company specific and is to favour one company. However, there was no amendment in the eligibility criteria in providing the touchscreen Area Alarm Panel. Thereafter, the petitioner filled in the tender. However, the petitioner did not offer the touchscreen area alarm which was the requirement and therefore, the petitioner's response was called and the petitioner was asked whether the petitioner can provide touchscreen alarm. However, the petitioner showed its inability. Again, vide communication dated 21.03.2018, the petitioner was called upon to clarify whether the petitioner can provide touchscreen alarm or not and/or whether the petitioner will be able to provide touchscreen alarm or not. However, according to the petitioner, touchscreen alarms were not mentioned in HTM02-01 standard and according to the petitioner, as the same was not the standard required, the petitioner showed its inability to provide touchscreen alarm as required. However, the petitioner stated that if the Hospital wants to change and deviate from HTM02- 01 standards guidelines published by Department of Health of UK, the petitioner can provide some other make of Imported Page 4 of 42 C/SCA/7201/2018 JUDGMENT Control Panel of European make but it will not comply to HTM02-01 standards. It was further submitted that if still the Hospital needs a touchscreen alarm, they will supply the same but of some another make. That thereafter, the petitioner has been declared disqualified at the technical stage on non-

fulfilling the eligibility criteria, more particularly, with respect to the touchscreen alarm of HTM02-01 standards. Hence, the petitioner has preferred the present Special Civil Application under Article 226 of the Constitution of India for the aforesaid reliefs.

3. Shri Ravi Karnavat, learned advocate, has appeared on behalf of the petitioner.

3.1 It is vehemently submitted by Shri Ravi Karnavat, learned advocate appearing on behalf of the petitioner that as such, the eligibility criteria provided in the tender document, more particularly, with respect to the touchscreen alarm of HTM02- 01 standard is absolutely illegal, unjust and contrary to the guidelines issued by the Central Vigilance Commission.

3.2 It is further submitted by Shri Ravi Karnavat, learned advocate appearing on behalf of the petitioner that as such the tender Notice dated 04.10.2017, is in violation of the Circular Page 5 of 42 C/SCA/7201/2018 JUDGMENT issued by the Central Vigilance Commission by which it is provided that while inviting the tenders and giving specifications, the same shall be generic in nature so as to provide equitable opportunities to the prospective bidders and that they shall not be specific in nature.

3.3 It is further submitted by Shri Ravi Karnavat, learned advocate appearing on behalf of the petitioner that respondent No.2 has malafidely fixed the technical requirements in tender document notice as to specific and not generic in order to support some specific party, which is in complete violation of Article 14 of the Constitution of India.

3.4 It is further submitted by Shri Ravi Karnavat, learned advocate appearing on behalf of the petitioner that in fact, there is no requirement of touchscreen alarm of HTM02-01 standards.

3.5 It is further submitted by Shri Ravi Karnavat, learned advocate appearing on behalf of the petitioner that all technical qualifications mentioned in tender Notice are of ISO-

7396-1 standard and verbatim for one particular Company and has been made in order to give work to one particular Company. It is submitted that therefore, when the policy of the Page 6 of 42 C/SCA/7201/2018 JUDGMENT State Government as well as the Central Government in light of CVC guidelines is that the specifications should be non-

company specific and general and maximum possible participation should be encouraged, insisting of such eligibility criteria, namely HTM02-01 standard, is absolutely illegal and mala fide.

3.6 It is further submitted by Shri Ravi Karnavat, learned advocate appearing on behalf of the petitioner that the petitioner and other participating bidders were asked to comply with certain international standards, namely HTM02- 01/NFPA / DIN / ISO-7396-1 in the features mentioned in the tender document issued by respondent No.2. It is submitted that although the broader area of tender document comprises of all four above mentioned standards but the details of the requirements are so designed, as it is only available for ISO7396-1 standard. It is submitted that for example, respondent No.2 has asked for "touchscreen" Area Alarm Panel, which is not available in HTM02-01 specification and is only available in ISO7396-1. It is submitted that the very function of "touchscreen" in Area Alarm Panel is such that it is of very less significance in relation to the basic purpose of area alarm which monitors the flow of gases in manifold area. It is submitted that there will be no difference whether it is Page 7 of 42 C/SCA/7201/2018 JUDGMENT touchscreen or LED type. It is submitted that therefore, as the rejection of petitioner's bid at technical bid stage on non-

fulfilling the eligibility criteria is absolutely illegal and mala fide and in breach of the guidelines issued by the CVC, the same deserves to be quashed and set aside.

3.7 Making above submissions and relying upon the decision of the Hon'ble Supreme Court in the case of Tata Cellular v.

Union of India reported in (1994)6 SCC 651 as well as the decision of the Hon'ble Supreme Court in the case of Meerut Development Authority v. Assn. of Management Studies reported in (2009)6 SCC 171, it is requested to allow the present petition and grant the reliefs as prayed.

4. Heard Shri Ravi Karnavat, learned advocate for the petitioner at length.

5. At the outset, it is required to be noted that in the present case, the petitioner has been disqualified at technical bid stage on non-fulfilling the required eligibility criteria, more particularly, inability to supply the touchscreen Area Alarm Panel as per HTM02-01 specification / standard as mentioned in the tender document. It is required to be noted that as such, the petitioner even after the pre-bid meeting in which same Page 8 of 42 C/SCA/7201/2018 JUDGMENT grievance was made by it with respect to the eligibility criteria, participated in the tender process and submitted its bid. It is also required to be noted that even prior to rejection, twice the response of the petitioner was called as to whether the petitioner will be able to provide touchscreen Area Alarm Panel as per the specification. However, the petitioner stated that the petitioner would be able to supply the alarm system of another specification and not as per the specification provided in the tender document. Only thereafter, and having disqualified at the technical stage on non-fulfilling the eligibility criteria, more particularly, with respect to the touchscreen Area Alarm Panel, the petitioner has challenged the conditions/ eligibility criteria after its bid has been rejected at the technical stage. Therefore, as such, after having participated in the tender process and thereafter having been rejected at the technical bid stage on non-fulfilling the conditions/ eligibility criteria, as such thereafter, it will not be open for the petitioner to challenge the eligibility criteria.

5.1 Even otherwise, it is required to be noted that earlier also, when the tenders were invited for the very subject contract, similar eligibility criteria was issued and insisted.



5.2    Even otherwise, it is further required to be noted that the



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       C/SCA/7201/2018                                                JUDGMENT

bids were invited by respondent No.2 - Gujarat Cancer and Research Institute for Medical Gas Pipeline System, i.e. to provide piped medical gases, medical compressed air and medical vacuum installation. In the project overview (scope of work) and MGPS specifications it is stated as under:

"Gases used for Human Healthcare, also known as Medical Gases, are strictly controlled by both legislation and standards so as to not impair human physiology. Provision of Oxygen, Nitrous Oxide, Compressed Air and Carbon Dioxide is a life-saving therapeutic requirement and are listed in Indian Pharmacopoeia 6 (IP 6) or in National Formulary or in US Pharmacopoeia or European Pharmacopoeia. Therefore these are considered drugs and have statutory specifications. These are included in National Pharmacopeia like any other drug and need to be complied with accordingly. There is a Pharmacopoeial monograph for each of them, which provides a reliable basis for making an independent and objective judgment as to the quality of these substances. The Pharmacopoeial monograph also provides specifications and test methods for determining compliance with this standard.

Medical Gas Pipeline System (MGPS) is intended to be a safe, convenient and cost-effective way to dispense these gases and works as a reliable alternative to the use of "portable" cylinders, portable compressors and portable suction units, providing gas or vacuum for clinical needs without the associated problems of porterage, noise and space wastage. It delivers medical gases, medical air and other gases from the source of supply to the appropriate terminal unit by means of a pipeline distribution system.

The Quality of Gas delivered by MGPS has to be as per various Pharmacopoeial requirements, however, procuring such high quality standard complying gases would be in the scope of the client.

The provision, installation, operation and maintenance of MGPS Page 10 of 42 C/SCA/7201/2018 JUDGMENT Installation should be governed by any one of the listed standards and guidelines: HTM02-01 / ISO 7396-1, 2:2007/ DIN/ NFPA-99.

For Supply, Installation, Testing and Commissioning of complete Medical Gases Pipeline System, all the components must comply and should be certified as per the referred standards and the bidder must be minimum 7 years in existence from the date of inception of registration/ foundation to prove having sufficient and consistent experience for installing this life support system. He should provide country of origin certificate at the time of supply. All materials, installation and workmanship should comply with the applicable requirements and standards addressed. All specifications should confirm to HTM 02 01, or NFPA 99, or ISO 7396-1, 2 or DIN standard wherever mentioned.

... ... ...

The technical specifications for the functionality of the system are prime criteria for the system design and implementation and the specified standards are the underlying guidelines for the compliance and certification purpose. The bidders must offer products broadly complying with the specifications specially in terms of performance and safety.

Bidder must follow one of above standards for the items i.e., Manifolds, Emergency manifolds/ system, fully automatic control panels, Medical Air Plant, Medical Vacuum Plant, Surgical Air Plant, AGSS/ WAGD plant, Gas Outlets, Alarms, Isolation Valves, and Valves Box with isolation valves, however, Medical grade copper pipes and fittings sourced locally but complying to one of the standards would be allowed to be used but these must be third party certified and preferably KITE marked to NHS standards of UK.

Scope includes Design, Supply, Installation, Testing and commissioning, after sales CMC of centralised medical gas pipeline system.

      *       Oxygen supply system
      *       Nitrous Oxide supply system
      *       Medical Compressed air system (4 Bar) on site generation
      *       Surgical Compressed air system (7 Bar) on site generation
      *       Medical Vacuum system, on site generation
      *       Carbon dioxide supply system


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        C/SCA/7201/2018                                        JUDGMENT


             *       Anesthetic gas scavenging system/ WAGD
             *       Area / Zonal valve service unit
             *       Area Alarm Panel
             *       Medical gas outlet points
             *       Pipe Distribution system
             *       Master alarm panel
             *       Bed head panels
             *       Accessories etc."

5.3 Thus, considering the scope of work, each and every system required, including the Area Alarm Panel is a highly technical requirement for which technical specifications are required and for which, as such, the employer, i.e. in the present case respondent No.2, can be said to be the best authority to decide the technical specifications and the requirement. As per catena of decisions which shall be referred to hereinbelow, a bidder cannot be permitted to say that the technical specifications must be such which suits him.

Therefore, in the facts and circumstances of the case, can it be said that the impugned decision disqualifying the petitioner at technical stage on non-fulfilling the technical qualifications / eligibility criteria is so perverse and/or arbitrary which calls for interference of this Court in exercise of powers under Article 226 of the Constitution of India?

6. While considering the issues involved in the present petition, the scope of judicial review in contractual matters, as considered by the Hon'ble Supreme Court in a few decisions Page 12 of 42 C/SCA/7201/2018 JUDGMENT and few decisions which have been recently dealt with and considered by the Division Bench of this Court in the case of Goldstone Infratech Limited v. State of Gujarat & Ors. -

Special Civil Application No.2097/2018 decided on 22.02.2018, are required to be referred to and considered.

While dealing with the similar issue, the Division Bench of this Court in the above decision, in Paragraphs 8.1 to 9.13 has observed and held as under:-

"[8.1] While considering the aforesaid issue, the scope of judicial review in the contract matter as considered by the Hon'ble Supreme Court in few decisions are required to be dealt with and considered. In the case of Educomp Datamatics Ltd. & Ors [(2004) 4 SCC 19], the Hon'ble Supreme Court has observed and held that terms of initiation to tender are not open to judicial scrutiny, the same being in the realm of contract. It is observed that the Government must have a free hand in setting the terms of the tender. It must have reasonable play in its joints as a necessary concomitant for an administrative body in an administrative sphere. It is further observed that the Court can scrutinize the award of the contracts by the Government or its agencies in exercise of their powers of judicial review to prevent arbitrariness or favoritism. It is entitled to pragmatic adjustments which may be called for by the particular circumstances. It is further observed and held that the Courts cannot strike down the terms of the tender prescribed by the Government because it feels that some other terms in the tender would have been fair, wiser or logical. While observing that in 9 to 12, the Hon'ble Supreme Court has observed and held as under:

9. It is well settled now that the courts can scrutinize the award of the contracts by the government or its agencies in exercise of its powers of judicial review to Page 13 of 42 C/SCA/7201/2018 JUDGMENT prevent arbitrariness or favoritism. However, there are inherent limitations in the exercise of the power of judicial review in such matters. The point as to the extent of judicial review permissible in contractual matters while inviting bids by issuing tenders has been examined in depth by this Court in Tata Cellular vs. Union of India [1994 (6) SCC 651].

After examining the entire case law the following principles have been deduced.

94. The principles deducible from the above are:

(1) The modern trend points to judicial restraint in administrative action.

(2) The court does not sit as a court of appeal but merely reviews the manner in which the decision was made.

(3) The court does not have the expertise to correct the administrative decision. If a review of the administrative decision is permitted it will be substituting its own decision, without the necessary expertise which itself may be fallible.

(4) The terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to tender is in the realm of contract. Normally speaking, the decision to accept the tender or award the contract is reached by process of negotiations through several tiers. More often than not, such decisions are made qualitatively by experts.

(5) The Government must have freedom of contract. In other words, a fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasi administrative sphere. However, the decision must not only be tested by the application of Wednesbury principle of reasonableness (including its other facts pointed out above) but must be free from arbitrariness not affected by bias or actuated by mala fides.

(6) Quashing decisions may impose heavy Page 14 of 42 C/SCA/7201/2018 JUDGMENT administrative burden on the administration and lead to increased and unbudgeted expenditure.

10. In Air India Limited vs. Cochin International Airport Limited, this Court observed:

The award of a contract, whether it is by a private party or by a public body or the State, is essentially a commercial transaction. In arriving at a commercial decision considerations which are paramount are commercial considerations. The State can choose its own method to arrive at a decision. It can fix its own terms of invitation to tender and that is not open to judicial scrutiny. It can enter into negotiations before finally deciding to accept one of the offers made to it. Price need not always be the sole criterion for awarding a contract. It is free to grant any relaxation, for bona fide reasons, if the tender conditions permit such a relaxation. It may not accept the offer even though it happens to be the highest or the lowest.

But the State, its corporations, instrumentalities and agencies are bound to adhere to the norms, standards and procedures laid down by them and cannot depart from them arbitrarily. Though that decision is not amenable to judicial review, the court can examine the decisionmaking process and interfere if it is found vitiated by mala fides, unreasonableness and arbitrariness.

11. This principle was again restated by this Court in Monarch Infrastructure (P) Ltd. vs. Commissioner, Ulhasnagar Municipal Corporation and Others [2000 (5) SCC 287]. It was held that the terms and conditions in the tender are prescribed by the government bearing in mind the nature of contract and in such matters the authority calling for the tender is the best judge to prescribe the terms and conditions of the tender. It is not for the courts to say whether the conditions prescribed in the tender under consideration were better than the one prescribed in the earlier tender invitations.

12. It has clearly been held in these decisions that the Page 15 of 42 C/SCA/7201/2018 JUDGMENT terms of the invitation to tender are not open to judicial scrutiny the same being in the realm of contract. That the government must have a free hand in setting the terms of the tender. It must have reasonable play in its joints as a necessary concomitant for an administrative body in an administrative sphere. The courts would interfere with the administrative policy decision only if it is arbitrary, discriminatory, mala fide or actuated by bias. It is entitled to pragmatic adjustments which may be called for by the particular circumstances. The courts cannot strike down the terms of the tender prescribed by the government because it feels that some other terms in the tender would have been fair, wiser or logical. The courts can interfere only if the policy decision is arbitrary, discriminatory or mala fide.

[8.2] In the case of Central Coalfields Limited and Ors. (Supra), the Hon'ble Supreme Court after considering the host of decisions, has observed and held 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. It is observed and held that interference is permissible only if the decision making process is mala fide or is intended to favour someone. It is further observed that 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. It is further observed that in other words, the decision making process or the decision should be perverse and not merely faulty or incorrect or erroneous. In the aforesaid decision, the Hon'ble Supreme Court has considered its earlier decision in the case reported in (1989) 3 SCC 293 as well as decision in the case reported in (1994) 6 SCC 651 as well as in the case of (2007) 4 SCC 517. After considering the aforesaid decisions, the Hon'ble Supreme Court has went a step further and has held that the decision if challenged, the Constitutional Court can interfere if the decision is perverse. However, the Constitutional Courts are expected to exercise restrain in interfering with the administrative Page 16 of 42 C/SCA/7201/2018 JUDGMENT decision and ought not to substitute its view for that of the administrative authority. Similar view has been taken by the Hon'ble Supreme Court in the case of Afcons Infrastructure Ltd (Supra).

[8.3] In the case of Central Coalfields Limited (Supra), the Hon'ble Supreme Court has further observed and held that the Court, 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 and held that whether a term 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. It is further observed in the case of Central Coalfields Limited (Supra) that it is 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. It is further observed that 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. Even in the case of Michigan Rubber (India) Limited (Supra), the decision which has been relied upon by the learned counsel for the petitioner, the Hon'ble Supreme Court has observed that the Court cannot interfere with the terms of the tender prescribed by the Government because it feels that some other terms in the tender would have been fair, wiser or logical.

The Honble Supreme Court in the case of Central Coalfields Limited (Supra), 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 Page 17 of 42 C/SCA/7201/2018 JUDGMENT 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 the 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 the 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: "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 recognized as being inapt and perhaps ungrammatical; nevertheless common Page 18 of 42 C/SCA/7201/2018 JUDGMENT sense was not offended in describing a person running a registered II grade hotel as a registered II Class hotelier.

Despite this construction in its favour, respondents 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 that case) were aware that non fulfillment of the eligibility condition of being a registered II 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 respondents 4. This resulted in unequal treatment in favour of respondents 4 treatment that was constitutionally impermissible. Expounding on this, it was held:

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."

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 the 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 scrutinize 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 Page 19 of 42 C/SCA/7201/2018 JUDGMENT 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 the Ramana Dayaram Shetty sense.

42. Unfortunately, this Court 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 the 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:

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C/SCA/7201/2018 JUDGMENT 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 succor 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 :

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 Page 21 of 42 C/SCA/7201/2018 JUDGMENT 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 the NIT and the GTC was certainly 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 the 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 the 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 Page 22 of 42 C/SCA/7201/2018 JUDGMENT intention if the employer and thereby rewrite he arrangement, it could lead to all sorts of problems including the one that were 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 Ahmed v. King Emperor, 1936 AIR(PC) 253 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 Ahmed 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, in so far 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.

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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 the NIT and the GTC was arbitrary or unreasonable or perverse in any manner whatsoever.

[8.4] In the case of Maa Binda Express Carrier & Anr. vs. North Eastern Frontier Railway & Ors. reported in (2014)3 SCC 760, the Honble Supreme Court had an occasion to consider the scope of judicial review in the matters relating to award of contracts by the State and its instrumentalities. In paras 8 to 11 the Honble Supreme Court has observed and held as under :

8. The scope of judicial review in matters relating to award of contract by the State and its instrumentalities is settled by a long line of decisions of this Court. While these decisions clearly recognize that power exercised by the Government and its instrumentalities in regard to allotment of contract is subject to judicial review at the instance of an aggrieved party, submission of a tender in response to a notice inviting such tenders is no more than making an offer which the State or its agencies are under no obligation to accept. The bidders participating in the tender process cannot, therefore, insist that their tenders should be accepted simply because a given tender is the highest or lowest depending upon whether the contract is for sale of public property or for execution of works on behalf of the Government. All that participating bidders are entitled to is a fair, equal and non discriminatory treatment in the matter of evaluation of their tenders. It is also fairly well settled that award of a contract is essentially a commercial transaction which must be determined on the basis of consideration that are relevant to such commercial decision. This implies that terms subject to which tenders are invited are not open to the judicial scrutiny unless it is found that the same have been tailor made to benefit any particular tenderer or class of tenderers. So also the authority inviting tenders can enter into negotiations or grant relaxation for bona fide and cogent reasons provided such relaxation is permissible under the terms governing the tender process.

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9. Suffice it to say that in the matter of award of contracts the Government and its agencies have to act reasonably and fairly at all points of time. To that extent the tenderer has an enforceable right in the Court who is competent to examine whether the aggrieved party has been treated unfairly or discriminated against to the detriment of public interest. (See Meerut Development Authority v. Assn. Of Management Studies4 and Air India Ltd. v. Cochin International Airport Ltd.

10. The scope of judicial review in contractual matters was further examined by this Court in Tata Cellular v.

Union of India, Raunaq International Ltd. case and in Jagdish Mandal v. State of Orissa [Supra] besides several other decisions to which we need not refer.

[8.5] In the case of Tata Cellular (Supra), the Honble Supreme Court in para 94 has observed and held as under:

94. The principles deducible from the above are :

[1] The modern trend points to judicial restraint in administrative action.

[2] The court does not sit as s 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 subsisting its own decision, without the necessary expertise which itself may be fallible.

[4] The terms of the invitation of 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 quasiadministrative 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.

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C/SCA/7201/2018 JUDGMENT [6] Quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure.

[8.6] In the case of Michigan Rubber [India] Limited (Supra), the Honble Supreme Court has observed and held as under :

24. It is also highlighted by the State as well as by the KSRTC that the tender conditions were stipulated by way of policy decision after due deliberation by the KSRTC. Both the respondents highlighted that the said conditions were imposed with a view to obtain good quality materials from reliable and experienced suppliers. In other words, according to them, the conditions were aimed at the sole purpose of obtaining good quality and reliable supply of materials and there was no ulterior motive in stipulating the said conditions.

[8.7] In the case of Tamil Nadu Generation & Distribution Corporation Limited [TANGEDCO] & Anr. vs. CSEPDITRISHE Consortium & Anr., reported in (2017) 4 SCC 318, the Hon'ble Supreme Court has observed and held that in a complex fiscal evaluation, the Court has to apply the doctrine of restraint. Several aspects, clauses, contingencies, etc., have also to be factored.

[9.0] In the case of Raunaq International Limited vs. I.V.R. Construction Ltd. and Ors. reported in (1999)1 SCC 492, it is observed and held by the Honble Supreme Court that (a) before entertaining a petition, Court must be satisfied that some element of public interest is involved; (b) the dispute purely is not inter se private parties; (c) difference in price offer between the two tenderers may or may not be decisive in deciding the question of public interest; (d) where a decision is taken bonafide and the choice exercised on legitimate consideration, without any arbitrariness, Court should not show indulgence; (e) While granting interim injunction, Court must carefully weigh conflicting public interest; (f) where the decision making process stands structured and the tender conditions do set out Page 26 of 42 C/SCA/7201/2018 JUDGMENT requirements, Court is entitled to examine application thereof to the relevant fact circumstances; (g) relaxation if otherwise permissible, in terms of the conditions must be exercised for legitimate reasons; (h) nature and urgency in getting the project implemented is a relevant factor; (i) judicial review is permissible only on the established grounds, including malafide, arbitrariness or unreasonableness of the variety of Wednesbury principle.

[9.1] The Honble Apex Court in the case of Master Marine Services (P) Ltd. vs. Metlalfe & Hodg Kinson (P) Ltd. and another reported in (2005) 6 SCC 138 (Two Judges), Court reiterated the principles that: (a) State can choose its own method to arrive at a decision;

(b) State and its instrumentalities have duty to be fair to all concerned; (c) even when some defect is found in decision making process, Court must exercise its extra ordinary writ jurisdiction with great caution and that too in furtherance of public interest; and (d) larger public interest in passing an order of intervention is always a relevant consideration.

[9.2] The Honble Apex Court in the case of Jagdish Mandal vs. State of Orissa and others reported in (2007)14 SCC 517 (Two Judges), reiterated the aforesaid principles by stating that before interfering in a tender and contractual matter, in exercise of its power of judicial review, Court should pose itself the following question:

(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.

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C/SCA/7201/2018 JUDGMENT If the answer is in the negative, there should be no interference under Article 226. Most recently the Honble Supreme Court in the case of Central Coalfields Limited (Supra), observed that: If an administrative decision, such as a deviation in the terms of the 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 ..

[9.3] In the case of Maa Binda Express Carrier and another (Supra), the Honble Supreme Court relying upon its earlier decisions reiterated the following principles: 23& &

(a) the basic requirement of Article 14 is fairness in action by the State, and nonarbitrariness 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 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 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 Page 28 of 42 C/SCA/7201/2018 JUDGMENT 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 fundamental right to carry on business with the Government....

(Emphasis supplied) [9.4] The principles stand reiterated in Haryana Urban Development Authority and others vs. Orchid Infrastructure Developers Private Limited reported in (2017) 4 SCC 243 (Two Judges) and Reliance Telecom Limited and another vs. Union of India and another reported in (2017) 4 SCC 269 (Two Judges).

[9.5] In the case of International Trading Co. and Another (Supra), while emphasizing on national priorities, the Honble Supreme Court has observed and held in paras 22 and 23 as under:

22. If the State acts within the bounds of reasonableness, it would be legitimate to take into consideration the national priorities and adopt trade policies. As noted above, the ultimate test is whether on the touchstone of reasonableness the policy decision comes out unscathed.

23. Reasonableness of restriction is to be determined in an objective manner and from the standpoint of interests of the general public and not from the standpoint of the interest of persons upon whom the restrictions have been imposed or upon abstract consideration. A restriction cannot be said to be unreasonable nearly because in a given case, it operates harshly. In determining whether there is any unfairness involved; the nature of the right alleged to have been infringed the underlying purpose of the restriction imposed, the extent and urgency of the evil sought to be remedied thereby, the disproportion of the imposition, the prevailing condition at the relevant time, enter into judicial verdict. The reasonableness of the legitimate expectation has to be determined with respect to the circumstances relating to the trade or business in question. Canalization of a particular business in favour of even a specified individual is reasonable where the interests of the country are Page 29 of 42 C/SCA/7201/2018 JUDGMENT concerned or where the business affects the economy of the country. (See Parbhani Transport Coop. Society Ltd.

v. Regional Transport Authority5, Shree Meenakshi Mills Ltd. v. Union of India6, Hari Chand Sarda v. Mizo District Council7 and Krishnan Kakkanth v. Govt. of Kerala8.) [9.6] In the case of Global Energy Ltd. and Another V/s. Adani Exports Ltd. and Others reported in (2005)4 SCC 435, it was observed that unless terms of a tender notice are wholly arbitrary, discriminatory or actuated by malice are not subject to judicial review. It was observed as under:

10. The principle is, therefore, well settled that the terms of the invitation to tender are not open to judicial scrutiny and the Courts cannot whittle down the terms of the tender as they are in the realm of contract unless they are wholly arbitrary, discriminatory or actuated by malice. This being the position of law, settled by a catena of decisions of this Court, it is rather surprising that the learned Single Judge passed an interim direction on the very first day of admission hearing of the writ petition and allowed the appellants to deposit the earnest money by furnishing a bank guarantee or a bankers' cheque till three days after the actual date of opening of the tender. The order of the learned Single Judge being wholly illegal, was, therefore, rightly set aside by the Division Bench.

[9.7] In case of Siemens Aktiengeselischaft and Siemens Limited V/s. Delhi Metro Rail Corporation Ltd. and Others reported in (2014)11 SCC 288, the Honble Supreme Court relying upon the decision in the case of Tata Cellular (Supra), observed as under:

23. There is no gainsaying that in any challenge to the award of contact before the High Court and so also before this Court what is to be examined is the legality and regularity of the process leading to award of contract. What the Court has to constantly keep in mind is that it does not sit in appeal over the soundness of the decision. The Court can only examine whether the decision making process was fair, reasonable and Page 30 of 42 C/SCA/7201/2018 JUDGMENT transparent. In cases involving award of contracts, the Court ought to exercise judicial restraint where the decision is bonafide with no perceptible injury to public interest.

[9.8] In case of Association of Registration Plates V/s. Union of India and Others reported in (2005)1 SCC 679, the Honble Supreme Court examined the validity of the qualifying conditions imposed by the State authorities for procurement of high security number plates for vehicles across the country. In this context, it was observed as under:

30. Looking to the huge vehicular population of the country, the capacity of the manufacturer has to be as great because plates are to be fitted to a very large number of existing vehicles within first two years. Thereafter, every year about one lakh vehicles in each State would be required to be fitted with the plates. If the bulk of contract is exhausted in the first two years, fresh manufacturers would not come forward to undertake the remaining work as it would not be cost effective. A longterm contract was necessitated for various reasons such as necessity of huge investment for building infrastructure, uninterrupted supply of plates in the first two years and thereafter every year and the investment of such infrastructure requiring recovery over a long duration by way of supply. If the contract period is lowered, the cost of plate might go up as the huge investment will have to be recovered in a shorter period.

35. Taking up first the challenge to the impugned conditions in the Notices Inviting Tenders issued by various State authorities, we find sufficient force in submissions advanced on behalf of the Union and the State authorities and the contesting manufacturers. The State as the implementing authority has to ensure that scheme of high security plates is effectively implemented. Keeping in view the enormous work involved in switching over to new plates within two years for existing vehicles of such large numbers in each State, resort to 'trial and error' method would prove hazardous. Its concern to get the right and most competent person cannot be questioned. It has to eliminate manufacturers who have developed recently just to enter into the new field. The insistence of the Page 31 of 42 C/SCA/7201/2018 JUDGMENT State to search for an experienced manufacturer with sound financial and technical capacity cannot be misunderstood. The relevant terms and conditions quoted above are so formulated to enable the State to adjudge the capability of a particular tenderer who can provide a failsafe and sustainable delivery capacity. Only such tenderer has to be selected who can take responsibility for marketing, servicing and providing continuously the specified plates for vehicles in large number firstly in initial two years and annually in the next 13 years. The manufacturer chosen would, in fact, be a sort of an agent or medium of the RTOs concerned for fulfillment of the statutory obligations on them of providing high security plates to vehicles in accordance with rule 50. Capacity and capability are two most relevant criteria for framing suitable conditions of any Notices Inviting Tenders. The impugned clauses by which it is stipulated that the tenderer individually or as a member of jointventure must have an experience in the field of registration plates in at least three countries, a common minimum net worth of Rs. 40 Crores and either jointventure partner having a minimum annual turnover of at least Rs. 50 Crores and a minimum of 15% turnover of registration plates business have been, as stated, incorporated as essential conditions to ensure that the manufacturer selected would be technically and financially competent to fulfill the contractual obligations which looking to the magnitude of the job requires huge investment qualitatively and quantitatively.

38. In the matter of formulating conditions of a tender document and awarding a contract of the nature of ensuring supply of high security registration plates, greater latitude is required to be conceded to the State authorities. Unless the action of tendering Authority is found to be malicious and misuse of its statutory powers, tender conditions are unassailable. On intensive examination of tender conditions, we do not find that they violate the equality clause under Article 14 or encroach on fundamental rights of a class of intending tenderer under Article 19 of the Constitution. On the basis of the submissions made on behalf of the Union and State authorities and the justification shown for the terms of the impugned tender conditions, we do not find that the clauses requiring experience in the field of supplying registration plates in foreign countries and the Page 32 of 42 C/SCA/7201/2018 JUDGMENT quantum of business turnover are intended only to keep out of field indigenous manufacturers. It is explained that on the date of formulation of scheme in rule 50 and issuance of guidelines thereunder by Central Government, there were not many indigenous manufacturers in India with technical and financial capability to undertake the job of supply of such high dimension, on a long term basis and in a manner to ensure safety and security which is the prime object to be achieved by the introduction of new sophisticated registration plates.

39. The notice inviting tender is open to response by all and even if one single manufacture is ultimately selected for a region or State, it cannot be said that the State has created monopoly of business in favour of a private party. Rule 50 permits, the RTOs concerned themselves to implement the policy or to get it implemented through a selected approved manufacturer.

40. Selecting one manufacturer through a process of open competition is not creation of any monopoly, as contended, in violation of Article 19(1)(g) of the Constitution read with clause (6) of the said Article. As is sought to be pointed out, the implementation involves large network of operations of highly sophisticated materials. The manufacturer has to have embossing stations within the premises of the RTO. He has to maintain a data of each plate which he would be getting from his main unit. It has to be crosschecked by the RTO data. There has to be a server in the RTO's office which is linked with all RTOs' in each State and thereon linked to the whole nation. Maintenance of record by one and supervision over its activity would be simpler for the State if there is one manufacturer instead of multi manufacturers as suppliers. The actual operation of the scheme through the RTOs in their premises would get complicated and confused if multimanufacturers are involved. That would also seriously impair the high security concept in affixation of new plates on the vehicles. If there is a single manufacturer he can be forced to go and serve rural areas with thin vehicular population and less volume of business. Multi manufacturers might concentrate only on urban areas with higher vehicular population.

Thus, the Courts have consistently held that the scope of Page 33 of 42 C/SCA/7201/2018 JUDGMENT judicial review in the context of conditions of tenders is limited to examination on the basis of the arbitrariness, discrimination or malice. Therefore, the Court before intervening in tender or contractual matters in exercise of powers 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 negative, then there should be no interference under Article 226?

[9.9] Applying the law laid down by the Honble Supreme Court in the aforesaid decisions to the facts of the case on hand, we are of the opinion that looking to the purpose and object of the supply of electric buses under the FAME Scheme and the main object and purpose of FAME Scheme is to encourage Make in India, it cannot be said that the conditions impugned in the present petition can be said to be arbitrary and/or nonnexus with the object to be achieved. As such considering the law laid down by the Honble Supreme Court in the aforesaid decisions it is ultimately for the employer to stipulate any conditions of eligibility criteria and the same is not required to be interfered with by the Courts in exercise of powers under Article 226 of the Constitution of India unless they are found to be so arbitrary and/or perverse which a prudent person would not impose. Looking to the nature of work the buses to be supplied under the FAME Scheme and that when the concerned supplier ultimately would be getting 65% subsidy, we are of the opinion that the conditions impugned in the present petition being condition Nos. Clause 4.1, Clause 7.1(a), Clause 7.3(a)(i), Clause 7.3(a)(ii) to VolumeI of the RFP and also Clause 7.1 and Page 34 of 42 C/SCA/7201/2018 JUDGMENT Clause 12.1.D to VolumeIII cannot be said to be either arbitrary and/or the same has no nexus at all. It cannot be said that the conditions are such that no prudent person would impose such conditions. Merely because the conditions / eligibility criteria might not suit the bidder like the petitioners and/or by such conditions a prospective bidder is likely to be ineligible and/or excluded from the zone of consideration, such conditions are not required to be amended and/or modified at the instance of such proposed bidder. Even if by such conditions if some class is likely to be benefitted, such conditions cannot be said to be tailormade to suit only those particular class.

[9.10] As observed by the Honble Supreme Court in the case of Tata Cellular (Supra) when a conscious decision has been taken by the employer to impose certain conditions and/or provide the eligibility criteria and that too after obtaining the opinion of the Experts, normally the Court will not interfere with the same as the Court does not sit as a Court of Appeal but merely reviews the manner in which the decision was made. In the case of Tata Cellular (Supra), the Honble Supreme Court has further observed that the Court does not have expertise to correct the administrative decision. It is further observed that if the review of administrative decision is permitted, it will be substituting its own decision, without necessary expertise which itself may be fallible. At this stage few para No.82 of the decision of the Honble Supreme Court in the case of Tata Cellular (Supra) are required to be referred to and reproduced which are as under:

82. Bernard Schwartz in Administrative Law, 2nd Edn., p. 584 has this to say :

If the scope of review is too broad, agencies are turned into little more than media for the transmission of cases to the courts. That would destroy the values of agencies created to secure the benefit of special knowledge acquired through continuous administration in complicated fields. At the same time, the scope of judicial inquiry must not be so restricted that it prevents full inquiry into Page 35 of 42 C/SCA/7201/2018 JUDGMENT the question of legality. If that question cannot be properly explored by the judge, the right to review becomes meaningless. It makes judicial review of administrative orders a hopeless formality for the litigant.... It reduces the judicial process in such cases to a mere feint.' Two overriding considerations have combined to narrow the scope of review. The first is that of deference to the administrative expert. In Chief Justice Neely's words :

I have very few illusions about my own limitations as a judge and from those limitations I generalize to the inherent limitations of all appellate courts reviewing rate cases. It must be remembered that this Court sees approximately 1262 cases a year with five judges. I am not an accountant, electrical engineer, financier, banker, stock broker, or systems management analyst. It is the height of folly to expect judges intelligently to review a 5000 page record addressing the intricacies of public utility operation.' It is not the function of a judge to act as a superboard, or with the zeal of a pedantic schoolmaster substituting its judgment for that of the administrator. The result is a theory of review that limits the extent to which the discretion of the expert may be scrutinised by the nonexpert judge. The alternative is for the court to overrule the agency on technical matters where all the advantages of expertise lie with the agencies, If a court were to review fully the decision of a body such as state board of medical examiners it would find itself wandering amid the maze of therapeutics or boggling at the mysteries of the Pharmacopoeia'. Such a situation as a state court expressed it many years ago 'is not a case of the blind leading the blind but of one who has always been deaf and blind insisting that he can see and hear better than one who has always had his eyesight and hearing and has always used them to the utmost advantage in ascertaining the truth in regard to the matter in question'.

The second consideration leading to narrow review is that of calendar pressure. In practical terms it Page 36 of 42 C/SCA/7201/2018 JUDGMENT may be the more important consideration. More than any theory of limited review it is the pressure of the judicial calendar combined with the elephantine bulk of the record in so many review proceedings which leads to perfunctory affirmably of the vast majority of agency decisions."

[9.11] In the present case the conditions are imposed and the eligibility criteria is prescribed in the RFP by the respondent Nos.2 and 3 after consulting the Expert CEPT University and the conditions are imposed as suggested and/or opined by the Expert / Consultant.

[9.12] In the petition the petitioners seek to challenge the tender conditions contained in Clauses (i) No.4.1; (ii) No.7.1; (iii) No.7.2; (iv) No.7.3(a)(i); (v) No.7.3(a)(ii) of VolumeI; and (vi) Serial No.7.1; and (vii) Serial No.12.1.D of VolumeIII of the RFP dated 19.01.2018. Looking to the reliefs sought in the present petition the petitioners have requested to issue appropriate writ, direction and order directing the respondents to suitably amend / modify the aforesaid conditions which suits the petitioners own convenience. Thus, it can be said that the petitioners seek to rewrite and redetermine certain tender conditions of the RFP, so as to tailormake the said tender conditions only with a view to suit the petitioners own convenience. We are afraid that the petitioners can insist and/or pray to amend and/or modify the terms and conditions / eligibility criteria which suits the petitioners. We are afraid that such reliefs can be granted in exercise of powers under Article 226 of the Constitution of India, unless the eligibility criteria / conditions are found to be so arbitrary which no prudent person would impose and/or are found to be mainfestly tailormade to suit only a particular bidder and/or found to be malafide. In exercise of powers under Article 226 of the Constitution of India more particularly in a case where a prospective bidder / bidder has challenged the eligibility criteria as mentioned in the RFP, the Court is not required to consider each and every condition / eligibility criteria minutely.

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C/SCA/7201/2018 JUDGMENT [9.13] As observed by the Honble Supreme Court in the case of Monarch Infrastructure (P) Ltd. vs. Commissioner, Ulhasnagar Municipal Corporation and Others reported in (2000) 5 SCC 287 the terms and conditions in the tender are prescribed by the Government bearing in mind the nature of contract and in such matters the authority calling for the tender is the best Judge to prescribe the terms and conditions of the tender. It is further observed that it is not for the Courts to say whether the conditions prescribed in the tender under consideration were better than the one prescribed in the earlier tender invitations. It is further observed and held that the terms of the invitation to tender are not open to judicial scrutiny, the same being in the realm of contract. It is observed that the Government must have a free hand in setting the terms and conditions of the tender, it must have a reasonable play in its joints as a necessary concomitant for an administrative body in an administrative sphere. The Courts would interfere with the administrative policy decision only if it is arbitrary, discriminatory, mala fide or actuated by bias. It is entitled to pragmatic adjustments which may be called for by the particular circumstances. The Courts cannot strike down the terms of the tender prescribed by the government because it feels that some other terms in the tender would have been fair, wiser or logical...."

6.1 Identical question came to be considered by the Division Bench of this Court in the case of Tractors and Farm Equipment Limited v. Union of India And Ors. in Special Civil Application No.18153/2017 decided on 11.10.2017, and after considering the law laid down by the Hon'ble Supreme Court on the point, more particularly, with respect to judicial review of the eligibility criteria prescribed by the employer, it is observed and held that merely because the Page 38 of 42 C/SCA/7201/2018 JUDGMENT eligibility criteria may not be suitable to a bidder and/or considering the eligibility criteria it may not be found to be eligible, cannot be a ground to set aside the condition to become eligible once it is found to be reasonable and having a direct nexus with the scope of the work for which the tenders are invited.

6.2 In the case of Monarch Infrastructure (P) Ltd. vs. Commissioner, Ulhasnagar Municipal Corporation and Others reported in (2000) 5 SCC 287 it is observed and held by the Hon'ble Supreme Court that the terms and conditions in the tender are prescribed by the Government bearing in mind the nature of contract and in such matters the authority calling for the tender is the best Judge to prescribe the terms and conditions of the tender. It is further observed that it is not for the Courts to say whether the conditions prescribed in the tender under consideration were better than the one prescribed in the earlier tender invitations. It is further observed and held that the terms of the invitation to tender are not open to judicial scrutiny, the same being in the realm of contract.

It is observed that the Government must have a free hand Page 39 of 42 C/SCA/7201/2018 JUDGMENT in setting the terms and conditions of the tender, it must have a reasonable play in its joints as a necessary concomitant for an administrative body in an administrative sphere.

7. Applying the law laid down by the Hon'ble Supreme Court and the decisions of this Court referred to hereinabove to the facts of the case on hand and considering the scope of work for which the tenders are invited and as the technical specifications are required to be provided looking to the need, and the specifications are technical in nature, more particularly, MGPS installation is required to be used for supply of gas/ medical gases which are strictly controlled by both legislation and standards so as to not impair human physiology, and when a conscious decision has been taken while providing the technical specifications, insistence on the part of the respondent that the area alarm panel shall be touchscreen as per the specification/ standard provided in the technical specifications, the same cannot be said to be either arbitrary and/or perverse. The Court could be very slow in interfering with such decision.

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C/SCA/7201/2018 JUDGMENT

8. Now so far as the submission on behalf of the petitioner that such technical specification is specified with a view to aim only one Company and it could be generic as per the guidelines provided by the CVC is concerned, as observed and held by the Division Bench of this Court in the case of Tractors and Farm Equipment Limited v. Union of India And Ors. (supra), the guidelines provided by the CVC and/or the Government can be said to be providing general guidelines. It is further observed that if it is found appropriate by the employer looking to the nature of work and use, that some further conditions are required to be imposed, it will always open to provide further eligibility criteria. However such condition may not be perverse and / or unreasonable that no prudent person would think of imposing such condition. Even considering the eligibility criteria and the technical specifications, it cannot be said that insisting of touchscreen alarm system as per HTM02- 01 standard can be said to be specific. It can be said to be generic. It depends upon the need of the employer - Hospital.

9. Considering the aforesaid facts and circumstances and the law laid down by the Hon'ble Supreme Court referred to hereinabove and the decisions of this Court in the case of Page 41 of 42 C/SCA/7201/2018 JUDGMENT Tractors and Farm Equipment Limited v. Union of India And Ors. (supra) as well as Goldstone Infratech Limited v. State of Gujarat & Ors. (supra), we are of the opinion that the petitioner is not entitled to any relief as prayed for in the present petition. It will not be open for the petitioner to suggest the technical specifications which might suits him/it and/or the petitioner cannot be permitted to challenge the eligibility criteria / technical specifications which might not suit the petitioner. Under the circumstances, the present petition fails and the same deserves to be dismissed. It is, accordingly dismissed.

sd/-

(M.R. SHAH, J) sd/-

(A.Y. KOGJE, J) sunil Page 42 of 42

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Gujarat High Court