Gujarat High Court
Ocean Blue Boating Pvt Ltd vs State Of Gujarat on 12 July, 2018
Author: M.R. Shah
Bench: M.R. Shah, A.Y. Kogje
C/SCA/10078/2018 CAV JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 10078 of 2018
With
CIVIL APPLICATION NO. 1 of 2018
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE M.R. SHAH
and
HONOURABLE MR.JUSTICE A.Y. KOGJE
==========================================================
1 Whether Reporters of Local Papers may be allowed to see the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy of the judgment ?
4 Whether this case involves a substantial question of law as to the interpretation of the Constitution of India or any order made thereunder ?
========================================================== OCEAN BLUE BOATING PVT LTD Versus STATE OF GUJARAT ========================================================== Appearance:
MR SN SOPARKAR, SENIOR ADVOCATE with MS SALONEE KULKARNI, ADVOCATE, MS GRISHMA AHUJA, ADVOCATE, & MR SHALIN JANI, ADVOCATE for SHARDUL AMARCHAND MANGALDAS AND CO(8426) for the PETITIONER MR CHINTAN DAVE, ASSISTANT GOVERNMENT PLEADER for Respondent No.1 MR TANVISH U BHATT, ADVOCATE FOR M/S WADIA GHANDY AND CO(5679) for RESPONDENT(s) No. 4 MR PINAKIN M RAVAL(2495) for RESPONDENT(s) No. 2 NOTICE SERVED BY DS(5) for the RESPONDENT(s) No. 1,3,5 ========================================================== CORAM: HONOURABLE MR.JUSTICE M.R. SHAH and HONOURABLE MR.JUSTICE A.Y. KOGJE Page 1 of 61 C/SCA/10078/2018 CAV JUDGMENT Date : 12/07/2018 C.A.V. JUDGMENT (PER : HONOURABLE MR.JUSTICE M.R. SHAH)
1. By way of this petition under Article 226 of the Constitution of India, the petitioner has prayed for issuance of an appropriate Writ, direction or order to quash and set aside the issuance of the bid document and any steps taken by respondents Nos.1 to 3 pursuant to the bid document. In the alternative, it is prayed that an appropriate Writ, direction or order, be issued directing respondents Nos.1 and 2 to modify the bid document to allow reasonable variance in the technical specifications for rescue boats; and to provide for rational eligibility criteria for entities interested in submit bids pursuant to the bid document.
2. The facts leading to the present Special Civil Application and the case on behalf of the petitioner in nutshell are as under:
2.1 It is the case on behalf of the petitioner that it is India's premium Boating Company and a market leader in the sectors of commercial boating, leisure boating, defence Page 2 of 61 C/SCA/10078/2018 CAV JUDGMENT applications and boat infrastructure solutions. The petitioner has exclusive dealerships with the world's leading brands in motor/ sail boats, speed boats, High Density Polyethylene ("HDPE") rescue boats, etc. According to the petitioner, there are no Original Equipment Manufacturers (OEMs) of HDPE rescue boats in India. It is stated that when the Indian State agencies issue tenders for procurement for such rescue boats, Indian HDPE rescue boats suppliers such as the petitioner, make supplies by importing rescue boats from foreign OEMs.
2.2 It is the case on behalf of the petitioner that in the year 2017, respondent No.2 - Gujarat State Disaster Management Authority ("GSDMA") through the Gujarat State Disaster Rescue Force ("GSDRF") had invited bids in terms of the tender document dated 04.05.2017 for supply of 73 units of 8 seater rescue boats; 15 units of 14 seater boats and 5 units of air boats. It is the case on behalf of the petitioner that the tender notice/ tender document provided number of technical specifications as per Schedule-II as under:-
(Schedule-2) Specifications for HDPE LIFE BOAT FOR RESCUE (14 SEATER) • Rescue Boat should have Roto-moulded Double Skin Hull • Length of the Rescue Boat should be minimum 550 cm Page 3 of 61 C/SCA/10078/2018 CAV JUDGMENT • Width of the Rescue Boat should be minimum 240 cm • Weight of the Rescue Boat should be maximum 600 kg. • Capacity of the Rescue Boat should be minimum 14 persons • Hull Material should be HDPE & Hull Type should be `V' shaped • OBM: Minimum 50 HP 2 stroke Remote Operated Yamaha / Tohatsu OBM should be provided • OBM panel should be provided for fixing OBM • Console should be provided • Towing Eye should be provided • Anchor Cleat and Anchor Bulkhead should be provided • Fender Strip and Grab Handles should be provided • Passenger Grab Rail should be provided • Foldable Canopy should be provided • Rescue Boat should be CE Certified or any IACS Member Certified (Certificate to be submitted with Technical Bid). • Manually operated Bilge pump should be provided.
**** Schedule-3 Specifications for the HDPE LIFE BOAT FOR RESCUE (8 SEATER) • Rescue Boat should have Roto-moulded Double Skin Hull • Length of the Rescue Boat should be minimum 400 cm • Width of the Rescue Boat should be minimum 170 cm • Depth of the Rescue Boast should be maximum 55 cm • Weight of the Rescue Boat should be maximum 150 kg. • Capacity of the Rescue Boat should be minimum 8 persons Page 4 of 61 C/SCA/10078/2018 CAV JUDGMENT • Hull Material should be HDPE & Hull Type should be `V' shaped • OBM: Minimum 30 HP 2 stroke Tiller Yamaha / Tohatsu OBM should be provided • OBM panel should be provided for fixing OBM • Mooring Ring, Mooring cleat and Chromed drain plug should be provided • Storage bench should be provided • Tow rope hole, Deck Lashing and Foot Bars should be provided • Foldable Canopy should be provided • Rescue Boat should be CE Certified or any IACS Member Certified (Certificate to be submitted with Technical Bid).
2.3 It is the case on behalf of the petitioner that the combination of the technical specifications was such that the boats manufactured by only two particular foreign Original Equipment Manufacturers can meet the requirements and in particular, only FUNYAK SECU 13 manufactured by FunYak meets the technical specifications for the 8 seater boats while only MAC 570 manufactured by MAC Boats meets the specifications for the 14 seater boats. It is the case on behalf of the petitioner that therefore, the petitioner made a detailed representation and according to the petitioner, the petitioner suggested certain modifications to the technical specifications/ rigid criteria in relation to the length, width, capacity of the Page 5 of 61 C/SCA/10078/2018 CAV JUDGMENT rescue boats and acceptable brand of engines to be installed in the rescue boats, with no margin for variation. It is the case on behalf of the petitioner that a pre-bid meeting was held on 10.08.2017 in which the petitioner and other suppliers raised concern about the technical specifications favouring one particular dealer and informing the concerned authorities of respondent No.2 that the specifications were tailor-made to favour one particular dealer. It is the case on behalf of the petitioner that however, respondent No.2 did not provide a satisfactory response to the concerns of the petitioner and other suppliers. However, subsequently, on the representations made by the petitioner and other suppliers, GSDRF modified the technical specifications slightly by issuing a corrigendum dated 17.08.2017. It is the case on behalf of the petitioner that despite the aforesaid modification to the technical specifications, only two Original Equipment Manufacturers, namely, FunYak and Whaly Boats UK and two dealers in India including the petitioner, could become eligible to bid 8 seater HDPE rescue boats and in terms of the technical specifications. It is the case on behalf of the petitioner that once again, the petitioner raises same concern about 14 seater boats' technical specifications favouring one particular dealer and thereafter, the petitioner repeatedly informed the Page 6 of 61 C/SCA/10078/2018 CAV JUDGMENT concerned authorities of the GSDRF that the specifications mentioned in the year 2017 tender read with the corrigendum dated 17.08.2017 were still tailor-made to favour one particular dealer. It appears that thereafter, due to non-receipt of sufficient number of bids, respondent No.2 cancelled the tender notice and the petitioner was communicated such decision vide letter dated 10.04.2018.
2.4 That thereafter, respondent No.2 floated fresh tenders on or around 08.05.2018 in terms of the original bid document on the platform of respondent No.3 - Government e-
Marketplace for supply of 73 units of 8 seater rescue boats; 15 units of 14 seater boats and 5 units of air boats. It is the case on behalf of the petitioner that new fresh bid document is identical to the 2017 tender notice and like 2017 tender, the technical specification for HDPE rescue boats such as length, width, weight and carrying capacity were tailored to match the technical specifications of particular boats manufactured only by FunYak and MAC Boats. It is the case on behalf of the petitioner that the 2017 tender which had identical requirements to the bid document, was slightly amended upon the request of the petitioner and other suppliers before it was unilaterally cancelled by respondent No.2 by a corrigendum.
Page 7 of 61 C/SCA/10078/2018 CAV JUDGMENTHowever, fresh bid document issued on 08.05.2018 did not contain the ratifications made by the corrigendum and respondent No.2 has again reverted to the original position to the detriment of the petitioner as well as other suppliers.
2.5 It is the case on behalf of the petitioner that thereafter, the petitioner made number of representations with a request to the GSDRF to suitably modify the technical specifications to ensure fair competition. It is the case on behalf of the petitioner that thereafter, the petitioner has received the reply vide e-mail dated 24.05.2018 from respondent No.2 in which it has been stated that the question of changes in dimensions requested to suit one particular brand does not exist and that the technical specifications are "standard and best for rescue purposes".
2.6 It is the case on behalf of the petitioner that even in the fresh tender document/ bid document in the eligibility criteria, there is no mention to the experience in relation to marine or boating equipment. It is the case on behalf of the petitioner that thereafter, the petitioner came to know that from the bidders who have participated/ submitted the bids, three had no experience in relation to marine or boating Page 8 of 61 C/SCA/10078/2018 CAV JUDGMENT equipment and the other applicants had no reputation or antecedents in the marine equipment supply business in India.
It is the case on behalf of the petitioner that therefore, the petitioner addressed an additional letter dated 24.05.2018 to the Chief Executive Officer of respondent No.3 and brought to the notice of said respondent, the antecedents of the Companies that had participated in the bidding process on the platform of respondent No.3 pursuant to bid document.
2.7 It is the case on behalf of the petitioner that thereafter, as on 31.05.2018, the website of respondent No.3 showed that respondents No.4 and 5 and one Gravity Innovates have been declared as L2, L3 and L1 respectively in relation to the bid document. It is further the case on behalf of the petitioner that upon discovering that Gravity Innovates has been declared as L1 in relation to the bid document, the petitioner addressed a letter dated 01.06.2018 to respondent No.3 bringing it to the notice of respondent No.3 that Gravity Innovates has no experience whatsoever in supplying boating/ rescue equipments.
2.8 It is the case on behalf of the petitioner that thereafter, as on 04.06.2018, the website of respondent No.3 Page 9 of 61 C/SCA/10078/2018 CAV JUDGMENT modified the contents of its website to selectively hide the names of respondents No.4, 5 and Gravity Innovates who had been respectively declared as L2, L3 and L1 in relation to the bid document.
2.9 It is the case on behalf of the petitioner that as in view of rigidity of technical specifications in the bid documents, the petitioner was unable to participate in the bid process in terms of the bid documents, since none of the OEMs that the petitioner has exclusive arrangements with manufacture boats to the exact specifications required by the bid document. Therefore, the petitioner was constrained to address a letter dated 11.06.2018 to respondent No.1 to highlight the various flaws in the process of procurement of rescue boats by respondent No.2 on the platform of respondent No.3. It is the case on behalf of the petitioner that however, respondent No.1 has failed to take any action pursuant to the petitioner's letter dated 11.06.2018 and respondents No.2 and 3 have proceeded further with the tender process with the above-cited specifications which according to the petitioners are tailor-made to suit only one manufacturer, therefore, the petitioner has preferred the present Special Civil Application for the aforesaid reliefs.
Page 10 of 61 C/SCA/10078/2018 CAV JUDGMENT3. Shri S.N.Soparkar, learned Senior Advocate has appeared on behalf of the petitioner and Shri Tanvish U.Bhatt, learned advocate has appeared on behalf of respondent No.4 and Shir Pinakin M. Raval, learned advocate has appeared on behalf of respondent No.2. Though served, nobody appears on behalf of respondents Nos.3 and 5.
4.1 Shri S.N.Soparkar, learned Senior Advocate appearing on behalf of the petitioner has vehemently submitted that the bid documents contain technical specifications that are tailored to suit rescue boats that are manufactured by only two foreign companies and to favour their exclusive dealers in India.
4.2 It is vehemently submitted by Shri S.N.Soparkar, learned Senior Advocate appearing on behalf of the petitioner that as such, all the technical specifications stipulated in the bid document are required to be fulfilled. It is submitted that barring only two foreign companies/ manufacturers, no other manufacturer would become eligible and/or fulfill all the technical specifications. It is submitted that therefore, as the technical specifications are tailored to suit only few Page 11 of 61 C/SCA/10078/2018 CAV JUDGMENT manufacturers/ suppliers, the same deserves to be quashed and set aside and/or modified to the extent making others eligible so that there may be fair competition and/or the tender process becomes more competitive.
4.3 It is submitted by Shri S.N.Soparkar, learned Senior Advocate appearing on behalf of the petitioner that the technical specifications for the 8 seater and 14 seater HDPE rescue boats in the bid documents are fixed in such a way that internationally, only one OEM can supply each of the HDPE required rescue boats. It is submitted that the concerned OEMs have exclusive dealership with respondent No.5 and/or their associates and affiliates.
4.4 Shri S.N.Soparkar, learned Senior Advocate appearing on behalf of the petitioner has submitted that the bid document is drafted and framed to exclude the petitioner and other suppliers from participating in the bid process for the supply of 8 seater and 14 seater boats. It is submitted that the technical specifications mentioned in the bid documents are such that there is no possibility for the petitioner or any other supplier to make a bid to meet such specifications.
Page 12 of 61 C/SCA/10078/2018 CAV JUDGMENT4.5 It is further submitted by Shri S.N.Soparkar, learned Senior Advocate appearing on behalf of the petitioner that like most other tenders, even the technical specifications in the bid document do not even allow for minor variations which would have no impact on the quality or usefulness of the HDPE rescue boat supplied. It is further submitted by Shri S.N.Soparkar, learned Senior Advocate appearing on behalf of the petitioner that the 2017 tender, which had identical requirements to the impugned bid document was slightly amended upon the request of the petitioner and other suppliers, before it was unilaterally cancelled by respondent No.2 by the corrigendum. However, the bid document issued on 08.05.2018 did not contain the ratifications made by the corrigendum, indicating that respondent No.2, after correcting its position has reverted to its original position to the detriment of the petitioner as well as other suppliers.
4.6 It is further submitted by Shri S.N.Soparkar, learned Senior Advocate appearing on behalf of the petitioner that even in the fresh bid document, there is no provision for experience for supply of 73 units of 8 seater rescue boats; 15 units of 14 seater boats and 5 units of air boats. It is submitted that in absence of any condition for having sufficient Page 13 of 61 C/SCA/10078/2018 CAV JUDGMENT experience which can be said to be a vital condition and which could play an important role in getting the best, the bid document deserves to be quashed and set aside and/or modified, as prayed.
It is submitted by Shri S.N.Soparkar, learned Senior Advocate appearing on behalf of the petitioner that therefore, the eligibility criteria in the bid document which do not give any credence or weightage to the experience can be said to be arbitrary and mala fide which deserves to be quashed and set aside.
4.7 It is further submitted by Shri S.N.Soparkar, learned Senior Advocate appearing on behalf of the petitioner that even otherwise, the specifications in the bid document are not in compliance with the relevant guidelines issued by the Central Vigilance Commission in relation to the tender process.
It is submitted that the CVC guidelines provide that it is expected that tender conditions shall not be too specific nor too lax and shall ensure fair competition. It is submitted that in the present case, the bid document in view of its rigidity with regard to the technical specifications for the rescue boats to be procured are violative of the CVC guidelines being too specific.
Page 14 of 61 C/SCA/10078/2018 CAV JUDGMENT4.8 It is submitted by Shri S.N.Soparkar, learned Senior Advocate appearing on behalf of the petitioner that therefore as the technical qualifications mentioned in the bid documents are tailored to suit only one or two manufacturers in the world and/or its suppliers and they are arbitrary, discriminatory and mala fide, the same deserves to be quashed and set aside and/or the same are required to be modified so as to make the petitioner and others eligible to participate in the tender process and therefore to quash and set aside the entire tender process proceeded further on the basis of such arbitrary, discriminatory and mala fide technical specifications.
Making above submissions and relying upon the decision of the Hon'ble Supreme Court in the case of Meerut Development Authority v. Association of Management Studies And Another - (2009)6 SCC 171 (Paragraphs 26 to
28) and another decision of the Hon'ble Supreme Court in the case of Reliance Telecom Limited and Another v. Union of India And Another - (2017)4 SCC 269 (Paragraphs 40 to
45), it is requested to allow the present petition and grant the reliefs as prayed for in the petition.
Page 15 of 61 C/SCA/10078/2018 CAV JUDGMENT5. The present petition is vehemently opposed by Shri Pinakin M. Raval, learned advocate appearing on behalf of respondent No.2. A detailed affidavit is filed on behalf of respondent No.2.
5.1 A preliminary objection is raised by Shri Pinakin M. Raval, learned advocate appearing on behalf of respondent No.2 on entertainability of the present petition at this stage. It is submitted that as such, the petitioner has not participated in the tender process and has not submitted its tender and therefore, the petitioner has no locus to challenge the technical specifications mentioned in the bid document.
5.2 It is further submitted by Shri Pinakin M. Raval, learned advocate appearing on behalf of respondent No.2 that as such, tenders are floated in terms of the bid document on the platform of respondent No.3 on 08.05.2018 with the required technical specifications and eligibility criteria. It is submitted that thereafter, much water has flown and the tender process has proceeded further and thereafter when the same is at the final stage of taking final decision, to be taken by the highest committee headed by Hon'ble the Chief Minister, at that stage, belatedly, the petitioner has preferred Page 16 of 61 C/SCA/10078/2018 CAV JUDGMENT the present Special Civil Application on 22.06.2018 challenging the technical specifications. It is submitted that if the petitioner was so much aggrieved by the technical specifications and was so serious in challenging the same, it ought to have challenged the same at the earliest and therefore, the petitioner cannot be permitted now to challenge the technical specifications belatedly when the entire tender process has been completed.
5.3 It is further submitted by Shri Pinakin M. Raval, learned advocate appearing on behalf of respondent No.2 that even otherwise on merits also, the present petition deserves to be dismissed. It is vehemently submitted by Shri Pinakin M. Raval, learned advocate appearing on behalf of respondent No.2 that as such, the petitioner cannot insist to have the technical specifications which may suit it and/or some of the suppliers. It is submitted that as such, it is for the employer and/or the end user and/or the buyer/ purchaser to provide the technical specifications as per their requirements. It is submitted that merely because of some of the technical specifications a prospective bidder may not become eligible by not fulfilling some of the eligibility criteria/ technical specifications and/or by such technical specifications only a few may become eligible, cannot be a ground to set aside the Page 17 of 61 C/SCA/10078/2018 CAV JUDGMENT technical specifications which as such are just and proper and which are provided as per the requirements of the end-user / buyer. It is vehemently submitted by Shri Pinakin M. Raval, learned advocate appearing on behalf of respondent No.2 that by the aforesaid, it cannot be said that the technical specifications are tailored to suit only a few. It is submitted that merely because of compliance of such technical specifications only a few may become eligible, by that itself it cannot be said that technical specifications are tailored to suit only a few.
5.4 It is further submitted by Shri Pinakin M. Raval, learned advocate appearing on behalf of respondent No.2 that in the present case, after the first tender was cancelled/ scrapped due to non-availability of sufficient number of participants/ bidders, the process of bid has been entrusted to respondent No.3 - Government e-portal. It is submitted that after the first tender was cancelled thereafter when the fresh tenders are invited, the technical specifications are mentioned after getting the opinion of the experts/ experts' committee consisting of (1) ACEO GSDMA, (2) Inspector General of Police (Armed Units), Police Bhavan, (3) Director, State Fire Prevention Services, (4) Deputy Commandant, Indian Coast Page 18 of 61 C/SCA/10078/2018 CAV JUDGMENT Guard, and (5) Deputy Commandant, NDRF.
5.5 It is submitted by Shri Pinakin M. Raval, learned advocate appearing on behalf of respondent No.2 that the technical committee comprising of the aforesaid numbers finalized the technical specifications of the bids to be procured and thereafter the tender has been floated at Government e-
Marketplace.
5.6 It is further submitted by Shri Pinakin M. Raval, learned advocate appearing on behalf of respondent No.2 that opening of the bids for the rescue boats and HDPE roto moulded boats 14 seater boat was done on 25.05.2018 and that of air-boat and HDPE roto moulded 8 seater boat was done on 31.05.2018. It is submitted that thereafter, it was decided by the Competent Authority that GSDMA may go for reverse auction to get the reduction and more competitive prices. It is submitted that reverse auction was opened on GeM portal on 02.06.2018 and 03.06.2018. That a reduction in price was observed after opting the reverse auction process on the GeM portal. It is submitted that as reverse auction process was applied, thereafter, on the net/ site the names of the bidders who were L1, L2 and L3 were not mentioned because at that Page 19 of 61 C/SCA/10078/2018 CAV JUDGMENT time, nothing was clear who would be L1, L2 and L3. It is submitted that therefore, no mala fides can be attributed by non-mentioning of the names on the net subsequently.
5.7 Now so far as the submission on behalf of the petitioner regarding not providing any clause for experience in the eligibility criteria is concerned, it is submitted that in the present case, the contract is for supply and therefore, non-
mention of any experience as an eligibility criteria does not make the tender process/ tender document illegal and/or arbitrary. It is submitted that it might have a relevance so far as contract for manufacture and supply is concerned. It is submitted that therefore, for non-requirement of any experience as an eligibility criteria, the entire tender process is not required to be quashed and set aside.
Making above submissions and relying upon the decision of this Court in the case of Goldstone Infratech Limited v. State of Gujarat & Ors. (supra), it is requested to dismiss the present petition.
6. Present petition is opposed by Shri Tanvish U. Bhatt, learned advocate appearing on behalf of respondent No.4.
Page 20 of 61 C/SCA/10078/2018 CAV JUDGMENT6.1 It is vehemently submitted by Shri Tanvish U. Bhatt, learned advocate appearing on behalf of respondent No.4 that the petitioner is not entitled to the reliefs sought for in the petition in a petition under Article 226 of the Constitution of India.
6.2 It is vehemently submitted by Shri Tanvish U. Bhatt, learned advocate appearing on behalf of respondent No.4 that merely because some of the conditions may not suit the petitioner and/or by cumulative technical specifications, only a few may qualify, it cannot be said that the technical specifications are tailored.
6.3 Shri Tanvish U. Bhatt, learned advocate appearing on behalf of respondent No.4 has as such disputed that by the technical qualifications provided in the tender document, only one or two manufacturers will qualify. It is submitted that even the petitioner is not entitled to any relief sought for in the petition on the ground of delay and not approaching the Court at the relevant time and approaching the Court after the entire bid process is completed.
Page 21 of 61 C/SCA/10078/2018 CAV JUDGMENTMaking above submissions and relying upon the decision of the Division Bench of this Court in Goldstone Infratech Limited v. State of Gujarat & Ors. (supra), in which the Division Bench of this Court has considered almost all the decisions on interference by courts in contractual/ tender matters, it is requested to dismiss the present petition.
7. Heard learned counsel appearing on behalf of the respective parties at length.
8. At the outset, it is required to be noted that in the present petition under Article 226 of the Constitution of India, the petitioner has prayed to quash and set aside the issuance of the bid document, more particularly, the technical specifications in the bid document as well as the condition that to become eligible, a bidder must comply with and/or satisfy all the technical specifications. In the alternative, it is prayed to issue an appropriate Writ, direction or order, directing respondents Nos.1 and 2 to modify the bid document to allow reasonable variance in the technical specifications for the purchase of rescue boats.
8.1 It is the case on behalf of the petitioner that all Page 22 of 61 C/SCA/10078/2018 CAV JUDGMENT technical specifications provided in the bid document are tailored to suit only two manufacturers and if all the technical qualifications are to be complied with and/or satisfied, barring a few, no other bidder, including the petitioner, would qualify.
It is the case on behalf of the petitioner that by not providing any clause to relax any of the technical qualifications and not providing/ allowing any reasonable variance in the technical qualifications, the petitioner and other bidders will never be qualified, therefore, it is prayed to quash and set aside the bid document and in the alternative to direct respondents No.1 and 2 to modify the bid document so as to allow reasonable variance in the technical qualifications. It is also the case on behalf of the petitioner that not insisting for any experience would permit anyone who might be in the business recently to qualify and/or compete the bid and therefore, not providing any experience in the eligibility criteria renders the bid document arbitrary and therefore also the entire process deserves to be quashed and set aside.
The other submissions are already recorded hereinabove.
9. While considering the issues involved in the present Page 23 of 61 C/SCA/10078/2018 CAV JUDGMENT petition, the scope of judicial review in contractual matters, as considered by the Hon'ble Supreme Court in a 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. (supra) and in the case of MDD Medical Systems (India) Pvt. Ltd. v.
State of Gujarat - Special Civil Application No.7201/2018, is required to be referred to and considered.
While dealing with the similar issue, the Division Bench of this Court in the case of MDD Medical Systems (India) Pvt. Ltd.
v. State of Gujarat (supra) in Paragraphs 6 to 6.2 has observed and held as under:
"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 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 Page 24 of 61 C/SCA/10078/2018 CAV JUDGMENT 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 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 Page 25 of 61 C/SCA/10078/2018 CAV JUDGMENT to correct the administrative decision. If a review of the administrative decision is permitted it will be substituting its own decision, without the necessary expertise which itself may be fallible.
(4) The terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to tender is in the realm of contract. Normally speaking, the decision to accept the tender or award the contract is reached by process of negotiations through several tiers. More often than not, such decisions are made qualitatively by experts.
(5) The Government must have freedom of contract. In other words, a fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasi administrative sphere. However, the decision must not only be tested by the application of Wednesbury principle of reasonableness (including its other facts pointed out above) but must be free from arbitrariness not affected by bias or actuated by mala fides.
(6) Quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure.
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 Page 26 of 61 C/SCA/10078/2018 CAV JUDGMENT 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 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.
Page 27 of 61 C/SCA/10078/2018 CAV JUDGMENT[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 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 Page 28 of 61 C/SCA/10078/2018 CAV JUDGMENT 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 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, Page 29 of 61 C/SCA/10078/2018 CAV JUDGMENT 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 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 Page 30 of 61 C/SCA/10078/2018 CAV JUDGMENT 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 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 Page 31 of 61 C/SCA/10078/2018 CAV JUDGMENT 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:
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 Page 32 of 61 C/SCA/10078/2018 CAV JUDGMENT 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 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 Page 33 of 61 C/SCA/10078/2018 CAV JUDGMENT 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 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 Page 34 of 61 C/SCA/10078/2018 CAV JUDGMENT 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.
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 :
Page 35 of 61 C/SCA/10078/2018 CAV JUDGMENT8. 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.
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 Page 36 of 61 C/SCA/10078/2018 CAV JUDGMENT 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.
[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.Page 37 of 61 C/SCA/10078/2018 CAV JUDGMENT
[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 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 Page 38 of 61 C/SCA/10078/2018 CAV JUDGMENT 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.
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& & Page 39 of 61 C/SCA/10078/2018 CAV JUDGMENT
(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 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 Page 40 of 61 C/SCA/10078/2018 CAV JUDGMENT 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 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 Page 41 of 61 C/SCA/10078/2018 CAV JUDGMENT 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 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.
Page 42 of 61 C/SCA/10078/2018 CAV JUDGMENTThereafter, 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 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 Page 43 of 61 C/SCA/10078/2018 CAV JUDGMENT 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 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 Page 44 of 61 C/SCA/10078/2018 CAV JUDGMENT 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 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, Page 45 of 61 C/SCA/10078/2018 CAV JUDGMENT 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 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 Page 46 of 61 C/SCA/10078/2018 CAV JUDGMENT 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 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 Page 47 of 61 C/SCA/10078/2018 CAV JUDGMENT 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 scrutinized 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 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) Page 48 of 61 C/SCA/10078/2018 CAV JUDGMENT 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 manifestly 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.
[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 Page 49 of 61 C/SCA/10078/2018 CAV JUDGMENT 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 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 Page 50 of 61 C/SCA/10078/2018 CAV JUDGMENT 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."
Applying the law laid down by the Hon'ble Supreme Court as well as this Court in the decisions referred to hereinabove to the facts of the case on hand, it is required to be considered whether the petitioner is entitled to the reliefs sought for in the present petition, in exercise of powers under Article 226 of the Constitution of India or not?
10. At this stage, it is required to be noted that as such, the technical specifications are provided looking to the need and as per the requirement of the end-user, more particularly, the Gujarat State Disaster Management Page 51 of 61 C/SCA/10078/2018 CAV JUDGMENT Authority. As stated in the affidavit-in-reply, the technical specifications are suggested and approved by the Technical Committee comprised of experts. Therefore, the technical specifications which are stated in the bid document are as such suggested, approved and finalized by the Technical Committee consisted of experts. As observed by the Hon'ble Supreme Court in the case of Tata Cellular vs. Union of India (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 Courts 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. At this stage, it is required to be noted that the learned counsel appearing on behalf of the petitioner is not in a position to point out how any of the technical qualifications are arbitrary. It appears that even it is not the case on behalf of the petitioner that any of the technical qualifications has no nexus with the product to be purchased. However, it is the case on behalf of the petitioner that as per the tender condition, all the technical specifications must be satisfied and/or complied with and it is the case on behalf of the petitioner that if all the technical qualifications are to be Page 52 of 61 C/SCA/10078/2018 CAV JUDGMENT satisfied, in that case, only one or two bidders will become eligible and the petitioner and/or other bidders/ prospective bidders may not be able to compete as they may not be able to fulfill all the technical qualifications. The aforesaid can hardly be a ground to set aside the technical specifications and/or the entire bid process. Merely because of the technical specifications provided only a few may become eligible and/or a few may not become eligible due to non-fulfillment of all the technical qualifications like the petitioner, it cannot be said that the technical specifications provided are tailored to suit only a few. Similar submission has been negatived by the Hon'ble Supreme Court in the case of Association of Registration Plates V/s. Union of India and Others (supra) and followed by the Division Bench of this Court in Tractors and Farm Equipment Limited v. Union of India And Ors. (supra) as well as Goldstone Infratech Limited v. State of Gujarat & Ors. (supra) and MDD Medical Systems (India) Pvt. Ltd. v. State of Gujarat (supra).
11. Now so far as the submission on behalf of the petitioner that earlier in the year 2017, when the tenders were invited, the very same technical specifications were provided which are now provided and in between, before the earlier bids Page 53 of 61 C/SCA/10078/2018 CAV JUDGMENT were cancelled, the technical specifications were slightly modified by a corrigendum and therefore, it is now not open to prescribe the same technical specifications again and revert back to the same position providing technical specifications which as such were modified. However, it is required to be noted that again, before the present technical specifications are provided, the opinion of the Expert Technical Committee was obtained and the technical specifications are finalized by the Technical Committee consisting of experts. Even otherwise, what is required to be considered is whether any of the technical qualifications can be said to be arbitrary and having no nexus with the goods to be purchased, in the present case, rescue boats. Again, the observations made by the Hon'ble Supreme Court in the case of Monarch Infrastructure (P) Ltd. vs. Commissioner, Ulhasnagar Municipal Corporation and Others (supra) are required to be referred to wherein 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 the terms of the invitation to tender are not open to judicial scrutiny, the same Page 54 of 61 C/SCA/10078/2018 CAV JUDGMENT 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 decision only if it is arbitrary, discriminatory, mala fide or actuated by bias. It is further observed that the Courts cannot strike down the terms and conditions of the tender prescribed by the Government because it feels that some other terms in the tender would have been fair, wiser or logical.
12. After considering various decisions of the Hon'ble Supreme Court on the point and the scope of judicial review in contractual matters, the Division Bench of this Court in the case of Goldstone Infratech Limited v. State of Gujarat & Ors. (supra) has observed and held that merely because the conditions/ eligibility criteria might not suit the bidder like the petitioner 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. It is further observed that even by such conditions if some class is Page 55 of 61 C/SCA/10078/2018 CAV JUDGMENT likely to be benefitted, such conditions cannot be said to be tailor-made to suit only a particular class. What is required to be considered is whether the technical qualifications provided are such that no prudent person would prescribe such technical specifications. It is required to be noted that in the present case, the bids are invited for supply of rescue boats which are required to have a special specific technical qualifications bearing in mind the security, safety and the purpose for which the rescue boats are to be purchased.
13. Now so far as the submission on behalf of the petitioner that earlier in the year 2017 when the bids were invited, it provided the experience as one of the eligibility criteria, however, when the fresh tenders are invited, such clause of experience is not there and therefore by not providing experience clause in the eligibility criteria, few new-
comers may be able to submit the tenders/ bids. However, it is required to be noted that as such, the bids are invited for supply of the rescue boats and the contract is not for manufacture of the rescue boats. It is not in dispute and even it is the case on behalf of the petitioner, so stated in the petition, that none of the bidders, even prospective bidders, would be manufacturing the boats in India and the rescue Page 56 of 61 C/SCA/10078/2018 CAV JUDGMENT boats are not at all manufactured in India and all the bidders/ prospective bidders would be only the suppliers. Therefore, ultimately, the bidders who will be the suppliers will have to procure the High Density Polyethylene rescue boats from the concerned foreign Original Equipment Manufacturers and such rescue boats will have to be in consonance with all the technical specifications, including the size etc. Therefore, in the facts and circumstances of the case, for not providing any experience in the eligibility criteria the bid document is not required to be quashed and set aside.
14. Now so far as the submission on behalf of the petitioner that insistence on the part of the concerned respondents to comply with all the technical qualifications/ specifications cumulatively would result in only one or two manufacturers becoming eligible and therefore, there shall not be any fair competition and therefore, same shall be against the guidelines issued by the CVC is concerned, as observed hereinabove, it cannot be said that the technical qualifications insisted are arbitrary and/or have no nexus with the goods to be procured and/or that no prudent person would provide such technical qualifications/ specifications. Merely because insistence in the bid document that all the technical Page 57 of 61 C/SCA/10078/2018 CAV JUDGMENT specifications must be satisfied and/or complied with cumulatively and or that only a few may become eligible because of such insistence cannot be a ground to set aside the tender document as prayed by the petitioner.
15. Now so far as reliance placed by learned Senior Advocate appearing on behalf of the petitioner upon the decision of the Hon'ble Supreme Court in the case of Reliance Telecom Limited and Another v. Union of India And Another (supra) is concerned, considering the aforesaid decision and the facts in the said case, we are of the opinion that the decision in the said case shall not be applicable to the facts of the case on hand and/or the same shall not be of any assistance to the petitioner. In the case before the Hon'ble Supreme Court, on the grounds stated in Paragraph-47, the Hon'ble Supreme Court specifically observed and found that the entire bid process was arbitrary and discriminatory.
Similarly, the decision of the Hon'ble Supreme Court in the case of Meerut Development Authority v.
Association of Management Studies And Another (supra) also shall not be applicable to the facts of the case on hand. As regards whether the technical specifications provided Page 58 of 61 C/SCA/10078/2018 CAV JUDGMENT can be said to be arbitrary and/or have no nexus and/or no prudent person would provide such technical specifications, the scope of judicial review is discussed hereinabove.
16. Now so far as the alternative prayer in the petition to issue an appropriate Writ, direction or order, directing respondents No.1 and 2 to modify the bid documents to allow reasonable variance in the technical specifications for rescue boats is concerned, such a relief is not permissible in exercise of powers under Article 226 of the Constitution of India. A bidder and/or prospective bidder cannot insist and/or pray to modify the bid document and/or technical specifications prescribed because either it does not suit it and/or for non-
compliance of such technical specifications, it may not become eligible. Court's interference would be required and/or called for only in a case where the technical specifications are so arbitrary and/or perverse and/or have no nexus and/or no prudent person would provide such technical specifications.
Under the circumstances, the petitioner shall not be entitled to even the alternative prayer, in exercise of powers under Article 226 of the Constitution of India.
17. The question whether the petitioner is entitled to Page 59 of 61 C/SCA/10078/2018 CAV JUDGMENT the reliefs sought in the present petition is also required to be considered from another angle, namely, that the petitioner has approached this Court challenging the technical specifications and the bid document by filing the present petition only on 22.06.2018. It is not in dispute that the bids were invited with technical specifications on or around 08.05.2018. That thereafter, the entire bid process has been continued and now the bids are at the stage of finalization before the High Power Committee for approval and/or final decision and at that stage, after a period of almost one and a half months and after the entire bid process has been concluded (except taking the final decision on the bids), the petitioner has preferred the present petition. The petitioner could have and ought to have challenged the technical specifications by filing the petition at the stage when the bids were invited with technical specifications on or about 08.05.2018. This may be an additional ground on which the petitioner may not be entitled to the reliefs in exercise of the powers under Article 226 of the Constitution of India.
18. In view of the above and for the reasons stated hereinabove, the present petition fails and the same deserves to be dismissed. It is, accordingly dismissed. Notice is Page 60 of 61 C/SCA/10078/2018 CAV JUDGMENT discharged.
In view of the above, Civil Application for direction also stands dismissed.
(M.R. SHAH, J) (A.Y. KOGJE, J) sunil Page 61 of 61