Jammu & Kashmir High Court - Srinagar Bench
Abdul Samad Wani & Ors vs Union Territory Of Jammu And Kashmir & ... on 31 May, 2021
Author: Ali Mohammad Magrey
Bench: Ali Mohammad Magrey
Serial No. 114
Supplementary-1 List
HIGH COURT OF JAMMU AND KASHMIR
AT SRINAGAR
{Through Virtual Mode}
WP(C) No.1036 /2021
CM Nos.3415/2021 & 3416/2021
Abdul Samad Wani & Ors.
... Petitioner(s)
Through:
Mr Altaf Mehraj, Advocate.
Versus
Union Territory of Jammu and Kashmir & Ors.
... Respondent(s)
CORAM:
Hon'ble Mr Justice Ali Mohammad Magrey, Judge.
(ORDER) 31.05.2021
01. The Petitioners claim to be registered Contractors with the Respondent Department. In terms of e-NIT No. 35/PHEQ of 2020-21 dated 15th of February, 2021, the Respondent-Department invited e-enters for execution of various works detailed out in the tender notice. The tender notice, as stated, prescribed 2nd of March, 2021 as the last date for submission of bids and 3rd of March, 2021 as the time of opening of technical bids. In response to the aforesaid tender notice, the Petitioners, besides other eligible Contractors, are stated to have submitted their tenders/ bids along with all requisite documents before the Respondent-Department. It is pleaded that the tender documents of the Petitioners were complete in all respects and that the Page 2 of 10 WP(C) No.1036/2021;
CM Nos.3415/2021 & 3416/2021 Petitioners were, thus expecting positive results therefrom. Thereafter, the technical bids were opened by the Respondent-Department, wherein, as stated, the tender documents of the Petitioners were found responsive and the process was initiated by the Respondent-Department for opening of financial bids. However, the Petitioner No.2 is stated to have filed a complaint before the Respondent No.4 with regard to the eligibility of the Respondent No.5, as a consequence whereof, a Committee was constituted vide Order dated 12th of April, 2021 and the process of allotment deferred. The Committee, on 26 th of April, 2021, submitted report whereby the Respondent No.5 was held eligible to partake in the tendering process pursuant to the e-NIT in question. Subsequently, on 27th of April, 2021, the Respondent No.5 was, upon opening of financial bids, declared L1 and allotted the works put to tender in terms of e-NIT dated 15th of February, 2021. Feeling aggrieved of the report of the Committee constituted by the Respondent-Department qua eligibility of Respondent No.5 as well as the subsequent decision of the Respondent- Department to allot the works to Respondent No.5, the Petitioners have challenged the vires of the same through the medium of the instant Writ Petition before this Court under Article 226 of the Constitution of India.
02. Mr Altaf Mehraj, the learned counsel for the Petitioners, submitted that the report/ decision of the Committee constituted by the Respondent-Department; whereby the Respondent No.4 has been found eligible to participate in the tendering process and the subsequent allotment of Page 3 of 10 WP(C) No.1036/2021;
CM Nos.3415/2021 & 3416/2021 works in favour of the Respondent No.5 pursuant to E-tender notice No.35/PHEQ of 2020-21 is result of colorable exercise of power on part of the Respondent-Department. It is submitted that the Petitioner No.2 had raised an extremely important issue of ineligibility of Respondent No.5 qua non- submission of requisite documents by the Respondent No.5 in tune with the terms and conditions of the tender notice in question, however, the same was not taken into consideration by the Committee constituted by the Respondent- Department for the purpose. It is pleaded that the impugned action of the Respondent-Department smacks of illegalities and malafides and, thus same deserves to be set at naught.
03. Heard the learned counsel for the Petitioners, perused the pleadings on record and considered the matter.
04. Admittedly, on the complaint of the Petitioner No.2 qua non- submission of requisite documents by the Respondent No.5 along with his tender document, the Respondent-Department constituted a Committee for the purpose prior to issuance of the final allotment order(s). The Committee, in its report, was of the opinion that the Respondent No.5/ L1 has placed on record all the requisite/ main documents in support of his bids and that the same are responsive. It was on the basis of such position that the Committee recommended the allotment of works in favour of the Respondent No.5/ L1. Once the Committee so constituted by the Respondent-Department in the Page 4 of 10 WP(C) No.1036/2021;
CM Nos.3415/2021 & 3416/2021 matter of ascertaining the veracity of the complaint filed by the Petitioner No.2 against the eligibility of Respondent No.5 reported that the Respondent No.5/L1 was meeting all the requirements so prescribed in the tender document while submitting his bids, in such eventuality, the action of the Respondent-Department in allotting the works in favour of Respondent No.5 cannot be said to be irrational or arbitrary in nature.
05. Besides, the Courts are expected to exercise judicial restraint in interfering with the administrative action, particularly in matter of tender or contract. Ordinarily, the soundness of the decision taken by the tendering issuing authority 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, firstly, if the decision made is so arbitrary and irrational that the Court can say that the decision is such that no responsible authority acting reasonably and in accordance with relevant law could have reached or, second, if the process adopted or decision made by the authority is malafide or intended to favour someone or, third, if the public interest is affected. In the case on hand, when the Respondent No.5/L1 was found to be meeting all the requirements so prescribed by the Respondent-Department in the tender notice, in such eventuality, the decision of the Respondent-Department in allotting the works in his favour cannot be said to be one where they have acted in a manner in which no responsible authority acting reasonably and in accordance with the relevant law would have acted. Furthermore, a bare Page 5 of 10 WP(C) No.1036/2021;
CM Nos.3415/2021 & 3416/2021 perusal of the pleadings on record, does not indicate that the decision made by the authority is malafide or intended to favour someone. Likewise, the third ground of public interest is also not affected in the present case because there is no dispute to the fact that the Respondent No.5, in the bidding process, was declared as the lowest bidder.
06. Law on the subject of scope of judicial review in the matters of Contract is no more res integra.
07. In case titled 'Tata Cellular V. Union of India; (1994) 6 Supreme Court Cases 651', at Paragraph No.94, Hon'ble the Supreme Court of the country, while dealing with the issue similar to the one subject matter of the instant Petition, evolved the following principles:
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 expe4rtise 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 Page 6 of 10 WP(C) No.1036/2021;
CM Nos.3415/2021 & 3416/2021 pointed out above) but must be free from arbitrariness not affected by bias or actuated by mala fides; and
6. Quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure."
08. In case titled 'Sterling Computers Limited V. M&N Publications Ltd.; (1993) 1 SCC 445', the Apex Court, at Paragraph No.12, has laid down as under:
"In contracts having commercial element, some more discretion has to be conceded to the authorities so that they may enter into contracts with persons, keeping an eye on the augmentation of the revenue. But even in such matters they have to follow the norms recognized by courts while dealing with public property. It is not possible for courts to question and adjudicate every decision taken by an authority, because many of the Government Undertakings which in due course have acquired the monopolist position in matters of sale and purchase of products and with so many ventures in hand, they can come out with a plea that it is not always possible to act like a quasi-judicial authority while awarding contracts. Under some special circumstances a discretion has to be conceded to the authorities who have to enter into contract giving them liberty to assess the overall situation for purpose of taking a decision as to whom the contract be awarded and at what terms. If the decisions have been taken in bona fide manner although not strictly following the norms laid down by the courts, such decisions are upheld on the principle laid down by Justice Holmes, that courts while judging the constitutional validity of executive decisions must grant certain measure of freedom of 'play in the joints' to the executive."
09. Again, the Apex Court, in case titled 'Directorate of Education & Ors. V. Educomp Datamatics Ltd. And Ors.; (2004) 4 SCC 19', while applying the principles enunciated in Tata Cellular's case (supra), at Paragraph No.12, observed, thus:
"12. It has been held in these decisions that the terms of the invitation to tender are not open to judicial scrutiny, the same being in the realm of Page 7 of 10 WP(C) No.1036/2021;
CM Nos.3415/2021 & 3416/2021 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, malafide 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, wise or logical. The Courts can interfere only if the policy decision is arbitrary, discretionary or malafide."
On an appreciation of the law laid down above, what comes to limelight is that the modern trend points to judicial restraint in administrative action and that the Court does not sit as a 'Court of Appeal', but merely reviews the manner in which the decision was made. It has also been declared that Court does not have the expertise to correct the administrative decision and that 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. Furthermore, fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasi- administrative sphere and quashing administrative decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure.
10. It is thus, settled that public authorities must be left with the same liberty as they have in framing the policies, even while entering into contracts because many contracts amount to implementation or projection of policies of the Government. But it cannot be overlooked that unlike policies, contracts Page 8 of 10 WP(C) No.1036/2021;
CM Nos.3415/2021 & 3416/2021 are legally binding commitments and they commit the authority which may be held to be a State within the meaning of Article 12 of the Constitution of India in many cases for years. It is for this reason that the Courts have impressed that even in contractual matters the public authority should not have unfettered discretion. In contracts having commercial element, some more discretion has to be conceded to the authorities so that they may enter into contracts with persons keeping an eye on the augmentation of the revenue. But, even in such matters, they have to follow the norms recognized by Courts while dealing with public property. It is not possible for the Courts to question and adjudicate every decision taken by an authority because many of the Government Undertakings, which in due course have acquired the monopolist position in matters of sale and purchase of products and with so many ventures in hand, they can come out with a plea that it is not always possible to act like a quasi-judicial authority while awarding contracts. Under some special circumstances, a discretion has to be conceded to the authorities who have to enter into contract by giving them liberty to assess the overall situation for purpose of taking a decision as to whom the contract be awarded and at what terms. If the decisions have been taken in bonafide manner, although not strictly following the norms laid down by the Courts, such decisions are upheld on the principle laid down by Justice Holmes that Courts, while judging the constitutional validity of executive decisions, must grant certain measure of freedom of 'play in the joints' to the executive. Page 9 of 10
WP(C) No.1036/2021;
CM Nos.3415/2021 & 3416/2021 Looking at the instant case in the above perspective, the Petitioners have not been able to establish before the Court that the decision taken by the Respondent-Department in allotting the works in favour of the Respondent No.5 is an arbitrary exercise of power or that the same was/ is malafide in nature. In 'Jagdish Mandal v. State of Orissa; (2007) 14 SCC 517', at Paragraph No.22, the Hon'ble Supreme Court held, thus:
"22. .... Therefore, a Court before interfering in tender or contractual matters in exercise of power of judicial review, should pose to itself the following questions:
(i) Whether the process adopted or decision made by the authority is mala fide or intended to favour someone;
OR Whether the process adopted or decision made is so arbitrary and irrational that the court can say: "the decision is such that no responsible authority acting reasonably and in accordance with relevant law could have reached";
(ii) Whether public interest is affected.
If the answers are in the negative, there should be no interference under Article 226."
From a bare perusal of the pleadings placed on record, it is more than apparent that the decision taken by the Respondent-Department in allotting the works in favour of the Respondent No.5 was certainly not irrational in any manner whatsoever or intended to favour anyone. This decision, apart from being lawful and sound, appears to have been taken by the Respondent-Department in view of the report of the Committee declaring that the Respondent No.5 was meeting all the requirements stipulated in the tender notice.
Page 10 of 10
WP(C) No.1036/2021;
CM Nos.3415/2021 & 3416/2021
11. In the premise, I do not find any merit in this Petition. It entails dismissal and is, accordingly, hereby dismissed. Pending miscellaneous applications, if any, shall also stand disposed of, accordingly.
12. No order as to costs.
(Ali Mohammad Magrey) Judge SRINAGAR May 31st, 2021 "TAHIR"
i. Whether the Order is reportable? Yes/ No.
ii. Whether the Order is speaking? Yes/ No.
TAHIR MANZOOR BHAT
2021.06.01 14:07
I attest to the accuracy and
integrity of this document