Madhya Pradesh High Court
M/S Balaji Security Services Pvt. Ltd. ... vs Madhya Pradesh Pashchim Kshetra Vidyut ... on 2 November, 2020
Author: S. C. Sharma
Bench: Shailendra Shukla, S. C. Sharma
Writ Petition Nos.11862/2020 (PIL)
and 13744/2020
-1-
HIGH COURT OF MADHYA PRADESH, BENCH AT INDORE
Division Bench : HON'BLE SHRI JUSTICE S. C. SHARMA AND
HON'BLE SHRI JUSTICE SHAILENDRA SHUKLA
Writ Petition No.11862/2020 (PIL)
Mahesh Garg
Versus
State of M. P. and Others
Writ Petition No.13744/2020
Balaji Security Services Pvt. Ltd.
Versus
Madhya Pradesh Paschim Kshetra Vidyut Vitaran
Company Ltd. and Others
Indore, dated 02/11/2020
Per S. C. Sharma, J:
Shri Mitul Saxena and Shri Piyush Parashar, learned counsel for
the petitioner(s).
Shri Purushaindra Kaurav, learned Senior Counsel along with
Shri Siddhartha Sharma, Shri Shrey Raj Saxena and Shri Prasanna
Prasad, learned counsel for the respondents No.3, 4, 5 and 6 in Writ
Petition No.11862/2020 and for respondents No.1 and 2 in Writ
Petition No.13744/2020.
02- Regard being had to the similitude in the controversy involved in
the present cases, the writ petitions were analogously heard and by a
common order, they are being disposed of by this Court. Facts of Writ
Petition No.11862/2020 are narrated hereunder.
03- The petitioner before this Court, who is claiming himself to be a
Writ Petition Nos.11862/2020 (PIL)
and 13744/2020
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social worker, has filed this present petition being aggrieved by order
dated 24/06/2020 passed by respondent No.3 - Madhya Pradesh
Paschim Kshetra Vidyut Vitaran Company Ltd. by which the earlier
tender issued on 09/12/2019 has been cancelled and a fresh tender
has been issued.
04- The facts of the case reveal that the respondent No.3 Company
has invited tender on 09/12/2019 for outsourcing the Unskilled, Semi-
skilled, Skilled and Highly Skilled Manpower required for
miscellaneous works for the Company and the total tender value was
Rs.325 Crores. The last date for submitting bid was 17/03/2020.
05- A pre-bid meeting took place on 23/12/2019. Various
amendments were made from time to time in tender documents and
35 bidders have participated in the tender process. The petitioner has
further stated that financial bids were opened and a bid list was
prepared, however, all of a sudden on 24/06/2020 tender
No.ED/IR/2019-20/PUR/TS-300 was cancelled and in respect of two
other distribution Companies i.e. MPPKVVCL (Jabalpur) and
MPMKVVCL (Bhopal) also similar tenders were cancelled on
25/06/2020 without assigning any reason.
06- The petitioner has further stated that in respect of earlier tender
a writ petition was preferred i.e. Orion Security Solutions Pvt. Ltd. Vs.
Madhya Pradesh Vidyut Vitaran Company Ltd., Writ Petition
No.6750/2020 and Clause 39.1 of Section-III of the Instructions to the
bidders was challenged and in this Court has dismissed the writ
Writ Petition Nos.11862/2020 (PIL)
and 13744/2020
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petition by an order dated 26/05/2020.
07- The contention of the petitioner is that after dismissal of the writ
petition even though the respondents have defended the terms and
conditions / justified terms and conditions of the earlier tender, they
have cancelled the same and therefore, the action of the respondents
as it is causing financial loss to the State exchequer and intents to
confer illegal benefits to certain unknown person is bad in law.
08- The other ground raised by the petitioner is that action of the
respondent is violative of Article 14 of the Constitution of India and
principles of natural justice have not been followed and the decision
was taken by the respondents in a haste manner without there being
any plausible reason. It has also been stated by the petitioner in the
Public Interest Litigation writ petition that the employees of the
Distribution Company were working hard to finalize the tender and at
the time the work was to be awarded, the same has been cancelled. It
has also been stated that the entire exercise of cancelling the tender is
bad in law and it is causing great loss to the State exchequer.
09- The following reliefs have been prayed by the petitioner:-
"(i) This Hon'ble Court may kindly be pleased to direct the
respondents to call for the entire record relating to the
present matter.
(ii) This Hon'ble Court may direct Respondent No.7 to enquire
the entire process and take action against the responsible
employees / officers for attempting to cause financial loss to
the public exchequer and confer illegal benefits to certain
unknown people / firms / companies participating in the
tender.
(iii) Any other appropriate writ / order / direction, which this
Hon'ble Court may deem fit and proper also kindly, be
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and 13744/2020
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issued in the interest of Justice."
10- Rejoinder has also been filed, additional documents have been
filed and various judgments have been relied upon by the petitioner to
bolster his contentions.
11- A reply has been filed in the matter and it has been argued by
Shri Purushaindra Kaurav, learned Senior Counsel along with Shri
Shrey Raj Saxena, learned counsel that the terms and conditions of
the earlier NIT do provide for withdrawal of tender and the same has
been done keeping in view Clause-28.1 of Section-III of the NIT. It has
been stated that the respondent Company is having an authority to
annul any tender and the action has been taken in the interest of
Company.
12- It has has also been stated that being a contractual matter, the
petitioner does not have any locus to file the present writ petition as he
was not a bidder in the earlier NIT and no public interest is involved. It
has also been stated that the reliefs sought by the petitioner are
beyond the purview of judicial review. In respect of locus to file the
present writ petition, the respondents have stated that the petitioner
was not a participant and Public Interest of Litigation in respect of such
a issue is not maintainable.
13- Reliance has been placed upon a judgment delivered in the
case of Surendra Pratap Singh Vs. State of M. P. and Others
reported in 2019(1) MPLJ 75. The respondents have also argued that
the tender was issued during Pre COVID-19 Pandemic and the entire
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and 13744/2020
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scenario over the globe has changed on account of COVID-19
Pandemic, hence a necessity arose to issue a new tender. It has also
been stated that no mala-fide is involved in the matter and therefore,
the petition filed by the petitioner deserves to be dismissed.
14- Reliance has also been placed upon a judgment delivered in the
case of Afcons Infrastructure Limited Vs. Nagpur Metro Rail
Corporation Limited and Another reported in (2016) 16 SCC 818
and Siemens Aktiengeselischaft and Siemens Limited reported in
(2014) 11 SCC 288. The petitioner has also filed various applications
including application for taking documents on record and has placed
reliance upon order passed in Writ Petition No.312/2020 and
8310/2020.
15- In the connected matter i.e. Writ Petition No.13744/2020, the
petitioner Balaji Security Services Pvt. Ltd. is aggrieved again by same
order of cancellation of tender dated 24/06/2020 passed by
respondent No.2 - Executive Director, Madhya Pradesh Paschim
Kshetra Vidyut Vitaran Company Ltd. The contention of the petitioner
is that the petitioner Company is engaged in the business of providing
manpower supply to various Institutions and Corporations in the State
of Madhya Pradesh and outside the State also and Notice Inviting
Tender was issued by MPPKVVCL on 09/12/2019. 35 participants
participated in the tender process and the tender was scheduled to be
opened on 27/05/2020.
16- The petitioner was the lowest bidder and was entitled for award
Writ Petition Nos.11862/2020 (PIL)
and 13744/2020
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of contract, however, the tender has been unilaterally and arbitrarily
annulled vide impugned order dated 24/06/2020 and a fresh tender
has been issued later on. It has been stated by the petitioner that the
petitioner after issuance of subsequent tender has again participated
in the tender process. The petitioner's contention is that he was to be
awarded the work in question and the respondent with an oblique and
ulterior motive has cancelled the tender by passing the impugned
order dated 24/06/2020.
17- The petitioner has also placed reliance upon a judgment
delivered in the case of Orion Security Solutions Pvt. Ltd. (Supra)
and it has been stated that in the earlier round of litigation at the
behest of Orion Security Solutions Pvt. Ltd., the validity of the tender
issued earlier was upheld and therefore, there was no necessity of
issuing second tender in respect of same subject requirement. The
action of the respondents smacks of mala-fide and they are prejudicial
to the interest of the petitioner.
18- It has also been stated that total workforce of 9021 workers is
urgently required by the respondents Company and by no stretch of
imagination tender could have been cancelled in the manner and
method it has been done by the respondents. The petitioner has stated
before this Court that the abrupt annulment of the tender process is
bad in law. No reason has been assigned for cancelling the earlier
tender and by a non-speaking order tender has been cancelled and
therefore, the order cancelling the tender be set aside and the work be
Writ Petition Nos.11862/2020 (PIL)
and 13744/2020
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awarded on the basis of earlier tender issued on the subject.
19- It has also been argued that issuance of a subsequent tender is
detrimental to larger public interest as the respondents are in acute
shortage of workers and the same will result in non-supply / short
supply of electricity and therefore, the Court should intervene in the
matter. The another ground raised is that there has been a clear
compromise of public interest in the matter.
20- Reliance has been placed upon a judgment delivered in the
case of Raunaq International Ltd. Vs. I. V. R. Construction Ltd. and
Others reported in (1999) 1 SCC 492, Monarch Infrastructure (P)
Ltd. Vs. Commissioner, Ulhasnagar Municipal Corporation and
Others reported in 2000 (3) SCR 1159. The petitioner has further
stated that the action of the respondents in cancelling the tender
amounts to gross misuse of discretionary powers and compromise of
fairness by respondent Company and therefore, it is violative of Article
14 of the Constitution of India.
21- Reliance has been placed upon a judgment delivered in the
case of Dutta Associates Pvt. Ltd. Vs. Indo Merchantiles Pvt. Ltd.
reported in (1997) 1 SCC 53 and Tata Cellular Vs. Union of India
reported in (1994) 6 SCC 651. The petitioner has also stated that the
impugned order is violative of Article 19(1)(g) and Article 301 of the
Constitution of India and deserves to be quashed.
22- The petitioner has prayed for the following reliefs:-
"(i) To quash the impugned order dated 24/6/2020 passed by
Writ Petition Nos.11862/2020 (PIL)
and 13744/2020
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Respondent no.2 on the grounds of the same being infested
with unreasonableness and mala fide and against public
interest and reasonableness;
(ii) To issue suitable directions to Respondent - MPPKVVCL to
proceed and complete the tender process;
(iii) To issue directions to Respondents to not take any actions
against the interests of the petitioner; and
(iv) To grant any other reliefs that may be suitable in the interest
of justice."
23- The respondents in the petition filed by Balaji Security Services
Pvt. Ltd. has again filed a detailed reply. Rejoinder has also been filed
in the matter. Other interlocutory applications have also been filed for
placing the documents on record.
24- The respondents have admitted that a tender was issued on
09/12/2019 for outsourcing manpower required for miscellaneous
works under the jurisdiction of MPPKVVCL and a pre-bid meeting was
held. As many as 36 representatives attended the pre-bid meeting and
thereafter, the respondents have opened the bid (Envelope-'A' and 'B')
on 18/03/2020. The list of qualified and disqualified bidders was
uploaded on 22/05/2020 and financial bid of 23 eligible bidders was
opened.
25- The respondents have categorically stated that 22 bidders were
found "L1" and the respondent was in the process of adjudging the
final "L1" as per Clause 39 of TS300 (Tie Breaking). The respondents
have stated that for the following reasons they have decided to annul
the tender and to issue a fresh tender:-
"a). Various types of manpower such as meter-readers, CCR
and outsource manpower for Corporate Office were not
included and the instant tender in question.
Writ Petition Nos.11862/2020 (PIL)
and 13744/2020
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b) In view of the various complexities and extraordinary
circumstances which had arisen due to the spread of
COVID-19 pandemic the terms and conditions of the tender
need to be revisited / reviewed.
c) Several petitions were filed before the various courts till the
date of annulment of the tender which necessitated re-
visiting the terms and conditions of the tender."
It has been argued by Shri Purushaindra Kaurav, learned Senior
Counsel that Clause 28.1 of Section-III instructions for bidders
empowers the respondents to annul the tender bidding process at any
stage prior to award of contract and therefore, the action taken by the
respondents was well within their domain.
26- Reasons have also been assigned for issuance of fresh tender
and it has been argued that the changes made in the tender are
beneficial to the Company and they are in public interest. The following
reasons have been assigned:-
"1. The quantum of manpower for different Operation and
Maintenance works at various Circles and corporate office of
Purchaser is being revised / increased from 9021 to 12150
under scope of word due to inclusion of Meter reader
category and manpower requirement of Corporation Office.
2. The maximum extent of manpower for different Operation
and Maintenance works at various Circles and corporate
office of Purchaser whether to increase or decrease is being
revised / increased from 20% to 50% under scope of work.
3. To ensure the safety of manpower and in the view of
quantum of manpower, new provisions has been inserted in
the General Conditions of Contract (GCC) as group
accidental insurance policy.
4. In the interest of Discom the minimum commission charges
reduced from 6% to 5%.
5. A highly skilled personal category has been inserted under
scope of work.
6. Overall experience in Outsourcing of Manpower in any
Central / State PSU (s) / Government Department (s) in
India has been relaxed for for five years and from 10 marks
to five marks in order to ensure competent bidding.
Writ Petition Nos.11862/2020 (PIL)
and 13744/2020
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7. In order to ensure participation of more competent bidders,
owing to the increase in the quantum of manpower (to be
outsourced), provision is stringent now as the Components
for Techno-Commercial Evaluation Providing outsource
manpower in Central / State PUS(s) / Government
Department(s) in last 3 financial years in India has been
revised to Contract must have at least 500 no. of manpower,
for at least one year (i.e. continuous period of 12 months) Or
The total no. of manpower deployed in maximum or less
than 5 contracts (in last 3 financial years in India) should
exceed 2500 person, where each contract must have
duration of at least one year (i.e. continuous period of 12
months).
8. Highest, single executed award on "per year contract value
out of all awarded outsourcing contracts, in any one of the
last 3 financial years, in any Central / State PUS (s) /
Government Department (s) in India has been revised as 1
mark for 2 crore in order to ensure competitive bidding, the
relaxation has been done.
9. In order to ensure competitive bidding, highest Turnover"
(from Outsourcing of Manpower) in any one of the last 3
financial years in any Central / State PUS (s) / Government
Department (s) in India has been relaxed and maximum
score marks revised from 30 to 40.
10. The number of lots is changed from previous tender (TS-
300)'s lots size from nine (9) lots of six (6) lots in ITB and
each bidder shall be allocated single lot. Earlier the lots were
to be allocated among five (5) bidders, however, in the
instant tender the lots are to be allocated among six (6)
bidder, as such more bidders will be awarded.
11. Lot size has been revised so that each bidder shall be
allocated single lot.
12. The condition of ITB have been amended, in order to ensure
allotment of at least one lot to the MP based firm in line with
the concept of Atma Nirbhar Madhya Pradesh.
13. In order to ensure competitive bidding, the condition have
been relaxed and it has been incorporated the reservation
for 6th lot for the firm based in MP if same is not allotted firm
L1 to L6.
14. The maximum Eligibility criteria average annual turnover has
been revised to 10 crore which was earlier 18 crore.
15. To ensure safety against Covid - 19 health of personal
deployed has been revised."
27- Lastly it has been argued that judicial review of the relief sought
for is not permissible in light of the judgment delivered in the cases of
Bharat Coking Coal Ltd. and Others Vs. AMR Dev Prabha and
Writ Petition Nos.11862/2020 (PIL)
and 13744/2020
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Others reported in 2020 SC OnLine SC 335, Municipal Corporation,
Ujjain Vs. BVG India Ltd. reported in (2018) 5 SCC 462, Montecarlo
Limited Vs. National Thermal Power Corporation Ltd. reported in
(2016) 15 SCC 272, Tamilnadu Generation and Distribution
Corporation Ltd. Vs. CSEPDI - TRISHE Consortium reported in
(2017) 4 SCC 318, JSW Infrastructure Limited Vs. Kakinada
Seaports Limited and Others reported in (2017) 4 SCC 170 and AMI
Art Creations and Offset Printers Vs. Board of Secondary
Education reported in 2010 (1) MPLJ 559.
28- This Court has gone through all the interlocutory applications
filed in both the connected writ petitions and heard learned counsel for
the parties at length and perused the record. The matter is being
disposed of at motion hearing stage itself with the consent of the
parties through video conferencing.
29- The facts of the case reveal that an NIT was issued for the work
of outsourcing of manpower required for miscellaneous works under
the jurisdiction of MPPKVVCL on 09/12/2019. A pre-bid meeting for
tender was conducted and about 36 representatives of various parties
were present. After receiving the suggestions / objections from the
participants certain amendments were incorporated in the NIT and the
bids received in Envelope-'A' and 'B' were opened on 18/03/2020. The
respondent Company after the Techno Commercial evaluation
uploaded the list of qualified and disqualified bidders on 22/05/2020 on
the e-portal and the financial bid of the 23 eligible bidders was opened.
Writ Petition Nos.11862/2020 (PIL)
and 13744/2020
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Out of 23 bidders, 22 bidders found "L1" bidder as per Clause-39 (Tie
Breaking) of TS300.
30- It is true that a writ petition was preferred challenging the
process of Tie Breaking and this Court by an order passed in Writ
Petition No.6750/2020 (Orion Security Solutions Pvt. Ltd. Vs. Madhya
Pradesh Vidyut Vitaran Company Ltd. and Another) vide order dated
26/05/2020 has dismissed the writ petition. This Court in the aforesaid
judgment has held as under:-
"The scope of judicial scrutiny has been considered by the
Hon'ble Apex Court time and again. In the case of Afcons
Infrastructure Limited v/s Nagpur Metro Rail Corporation
Limited reported in 2016 (16) SCC 818, the Apex Court has held
as under:-
"We may add the owner or the employer of a
project, having authored the tender documents, is the
best persons to understand and appreciate its
requirements and interpret its documents. The
constitutional Courts must defer to this understanding
and appreciation of the tender documents, unless there
a malafide or perversity in the understanding or
appreciation or in the application of the terms of the
tender conditions. It is possible that the owner of
employer of a project may give an interpretation to the
tender documents that is no acceptable to the
constitutional Courts but that by itself is not a reason for
interfering with the interpretation given".
The Apex Court in the case of Reliance Telecom Limited &
Others v/s Union of India & Others reported in 2017 (4) SCC 269
has again dealt with scope of interference in respect of the tender.
In the case of Tata Cellular v/s Union of India reported in
1994 (6) SCC 651 again the scope of judicial review has been
looked into by the Hon'ble Apex Court. In the aforesaid case, it has
been held that the terms of the invitation to tender cannot be open
to judicial scrutiny because the invitation to tender is in the realm of
contract and the Government must be allowed to have a fair play in
the joints as it is a necessary concomitant for an administrative
body functioning in an administrative sphere or quasi-administrative
sphere.
The Apex Court in the case of Monarch Infrastructure (P)
Limited v/s Ulhasnagar Municipal Corporation & Others
reported in 2000 (5) SCC 287 was again dealing with the N.I.T. And
Writ Petition Nos.11862/2020 (PIL)
and 13744/2020
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it has been held that it cannot say whether the conditions are better
than what were prescribed earlier, for in such matters, the authority
calling the tenders is the best judge. The Court declined to restore
status quo ante.
In the case of Cellular Operator Association of India &
Others v/s Union of India & Others reported in 2003 (3) SCC 186,
the Apex Court has held that in respect of the matters affecting
policy and those that require technical expertise, the Court should
show deference to, and follow the recommendations of the
Committee which is more qualified to address the issues.
In the considered opinion of this Court, the petitioner has
failed to establish that the criteria adopted by the respondents is
contrary to public interest, discriminatory or unreasonable. Hence,
the question of interference by this Court does not arise.
In the light of the aforesaid, this Court is of the considered
opinion that the condition in respect of tie, is certainly not at all
unreasonable, it has not been framed to favour a particular person
and the petitioner has not been able to establish mala-fide, hence
the question of interference by this Court does not arise. The
respondents, have stated before this Court, that they do not have
the manpower on account of the lockdown, they are not able to
engage daily wagers also as most of the migrant labours have left
for their native places, they should be given liberty to open the
financial bid immediately and to allot the work in order to ensure
that there is uninterrupted supply of electricity in the State of
Madhya Pradesh keeping in view the rainy season which is
approaching very fast.
Resultantly, the respondents shall open the financial bid also
and shall allot the work in question keeping in view the terms and
conditions of the NIT.
With the aforesaid, the Writ Petition stands dismissed. No
order as to costs."
The only issued decided in the aforesaid case was whether the
condition of Tie Breaking is proper or not. The other conditions of the
tender were not looked into.
31- The another important aspect of the case is that the initial NIT
was issued on 09/12/2019 which is a pre COVID situation and on
account of COVID-19 Pandemic the entire scenario has changed and
in those circumstances a fresh NIT was issued which included
additional manpower, certain more posts as well as other conditions.
Writ Petition Nos.11862/2020 (PIL)
and 13744/2020
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In the present case, Clause-28.1 of Section-III of Instructions of
Bidders empowers the Competent Authority to annul the tender at any
point of time. Clause-28.1 of the tender document reads as under:-
"28.1 The purchaser reserves to accept or reject any bid and
to annul the bidding process and reject all bids at any time prior to
the award of contract, without thereby incurring any liability to the
affected bidders or any obligation to inform the affected bidders of
the ground for such decision. No correspondence, in any form any
at any time, shall be entertained by the purchaser in this regard."
In light of the aforesaid clause, the Competent Authority is
certainly empowered to annul the NIT at any stage. The respondent
Company keeping in view the interest of the Company and public
interest has arrived at a conclusion to annul the earlier tender and
there are as many as 48 changes incorporated in the new tender
1444. The following are new provisions in the NIT:-
"1. The quantum of manpower for different Operation and
Maintenance works at various Circles and corporate office of
Purchaser is being revised / increased from 9021 to 12150
under scope of word due to inclusion of Meter reader
category and manpower requirement of Corporation Office.
2. The maximum extent of manpower for different Operation
and Maintenance works at various Circles and corporate
office of Purchaser whether to increase or decrease is being
revised / increased from 20% to 50% under scope of work.
3. To ensure the safety of manpower and in the view of
quantum of manpower, new provisions has been inserted in
the General Conditions of Contract (GCC) as group
accidental insurance policy.
4. In the interest of Discom the minimum commission charges
reduced from 6% to 5%.
5. A highly skilled personal category has been inserted under
scope of work.
6. Overall experience in Outsourcing of Manpower in any
Central / State PSU (s) / Government Department (s) in
India has been relaxed for for five years and from 10 marks
to five marks in order to ensure competent bidding.
7. In order to ensure participation of more competent bidders,
owing to the increase in the quantum of manpower (to be
Writ Petition Nos.11862/2020 (PIL)
and 13744/2020
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outsourced), provision is stringent now as the Components
for Techno-Commercial Evaluation Providing outsource
manpower in Central / State PUS(s) / Government
Department(s) in last 3 financial years in India has been
revised to Contract must have at least 500 no. of manpower,
for at least one year (i.e. continuous period of 12 months) Or
The total no. of manpower deployed in maximum or less
than 5 contracts (in last 3 financial years in India) should
exceed 2500 person, where each contract must have
duration of at least one year (i.e. continuous period of 12
months).
8. Highest, single executed award on "per year contract value
out of all awarded outsourcing contracts, in any one of the
last 3 financial years, in any Central / State PUS (s) /
Government Department (s) in India has been revised as 1
mark for 2 crore in order to ensure competitive bidding, the
relaxation has been done.
9. In order to ensure competitive bidding, highest Turnover"
(from Outsourcing of Manpower) in any one of the last 3
financial years in any Central / State PUS (s) / Government
Department (s) in India has been relaxed and maximum
score marks revised from 30 to 40.
10. The number of lots is changed from previous tender (TS-
300)'s lots size from nine (9) lots of six (6) lots in ITB and
each bidder shall be allocated single lot. Earlier the lots were
to be allocated among five (5) bidders, however, in the
instant tender the lots are to be allocated among six (6)
bidder, as such more bidders will be awarded.
11. Lot size has been revised so that each bidder shall be
allocated single lot.
12. The condition of ITB have been amended, in order to ensure
allotment of at least one lot to the MP based firm in line with
the concept of Atma Nirbhar Madhya Pradesh.
13. In order to ensure competitive bidding, the condition have
been relaxed and it has been incorporated the reservation
for 6th lot for the firm based in MP if same is not allotted firm
L1 to L6.
14. The maximum Eligibility criteria average annual turnover has
been revised to 10 crore which was earlier 18 crore.
15. To ensure safety against Covid - 19 health of personal
deployed has been revised."
In the considered opinion of this Court, the respondent
Company is the best Judge to annul a tender and for the reasons
assigned by the Company, the Company was justified in annulling the
Writ Petition Nos.11862/2020 (PIL)
and 13744/2020
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tender. The respondent Company is having expertise on the subject
and the requirement to avail the manpower solely lies with the
respondent Company. There is no irregularity / illegality in the decision
making process of the respondent Company.
32- The Hon'ble Supreme Court in the case of Bharat Coking Coal
Ltd. (Supra) in paragraphs No.29 to 42 and 54 has held as under:-
"29. The scope of judicial review in tenders has been
explored in-depth in a catena of cases. It is settled that
constitutional courts are concerned only with lawfulness of a
decision, and not its soundness. Phrased differently, Courts ought
not to sit in appeal over decisions of executive authorities or
instrumentalities. Plausible decisions need not be overturned, and
latitude ought to be granted to the State in exercise of executive
power so that the constitutional separation of powers is not
encroached upon.5 However, allegations of illegality, irrationality
and procedural impropriety would be enough grounds for courts to
assume jurisdiction and remedy such ills. This is especially true
given our unique domestic circumstances, which have
demonstrated the need for judicial intervention numerous times.
Hence, it would only be the decision-making process which would
be the subject of judicial enquiry, and not the end result (save as
may be necessary to guide determination of the former).
30. This position of law has been succinctly summed up in
Tata Cellular v. Union of India (supra), where it was famously
opined that:
"77. ... Therefore, it is not for the court to
determine whether a particular policy or particular
decision taken in the fulfilment of that policy is fair. It is
only concerned with the manner in which those
decisions have been taken. The extent of the duty to act
fairly will vary from case to case. Shortly put, the
grounds upon which an administrative action is subject
to control by judicial review can be classified as under :
(i) Illegality: This means the decision-maker must
understand correctly the law that regulates his
decision-making power and must give effect to it.
(ii) Irrationality, namely, Wednesbury
unreasonableness,
(iii) Procedural impropriety."
31. But merely because the accusations made are against
the State or its instrumentalities doesn't mean that an aggrieved
person can bypass established civil adjudicatory processes and
directly seek writ relief. In determining whether to exercise their
Writ Petition Nos.11862/2020 (PIL)
and 13744/2020
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discretion, writ courts ought not only confine themselves to the
identity of the opposite party but also to the nature of the dispute
and of the relief prayed for. Thus, although every wrong has a
remedy, depending upon the nature of the wrong there would be
different forums for redress.
32. In cases where a constitutional right is infringed, writs
would ordinarily be the appropriate remedy. In tender matters, such
can be either when a party seeks to hold the State to its duty of
treating all persons equally or prohibit it from acting arbitrarily; or
when executive actions or legislative instruments are challenged for
being in contravention to the freedom of carrying on trade and
commerce. However, writs are impermissible when the allegation is
solely with regard to violation of a contractual right or duty. Hence,
the persons seeking writ relief must also actively satisfy the Court
that the right it is seeking is one in public law, and not merely
contractual. In doing so, a balance is maintained between the need
for commercial freedom and the very real possibility of collusion,
illegality and squandering of public resources.
33. Such a proposition has been noticed by this Court even
earlier in Jagdish Mandal v. State of Orissa6 in the following words:
"22. Judicial review of administrative action is
intended to prevent arbitrariness, irrationality,
unreasonableness, bias and mala fides. Its purpose is to
check whether choice or decision is made "lawfully" and
not to check whether choice or decision is "sound".
When the power of judicial review is invoked in matters
relating to tenders or award of contracts, certain special
features should be borne in mind. A contract is a
commercial transaction. Evaluating tenders and
awarding contracts are essentially commercial
functions. Principles of equity and natural justice stay at
a distance. If the decision relating to award of contract is
bona fide and is in public interest, courts will not, in
exercise of power of judicial review, interfere even if a
procedural aberration or error in assessment or
prejudice to a tenderer, is made out. The power of
judicial review will not be permitted to be invoked to
protect private interest at the cost of public interest,
or to decide contractual disputes. The tenderer or
contractor with a grievance can always seek
damages in a civil court. Attempts by unsuccessful
tenderers with imaginary grievances, wounded pride
and business rivalry, to make mountains out of
molehills of some technical/procedural violation or
some prejudice to self, and persuade courts to
interfere by exercising power of judicial review,
should be resisted. Such interferences, either interim
or final, may hold up public works for years, or delay
relief and succour to thousands and millions and may
increase the project cost manifold."
(emphasis supplied)
Writ Petition Nos.11862/2020 (PIL)
and 13744/2020
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34. Such conscious restraint is also necessary because
judicial intervention by itself has effects of time and money, which if
unchecked would have problematic ramifications on the State's
ability to enter into contracts and trade with private entities. Further,
it is not desirable or practicable for courts to review the thousands
of contracts entered into by executive authorities every day. Courts
also must be cognizant that often-a-times the private interest of a
few can clash with public interest of the masses, and hence a
requirement to demonstrate effect on 'public interest' has been
evolved by this Court. 7
35. It is thus imperative that in addition to arbitrariness,
illegality or discrimination under Article 14 or encroachment of
freedom under Article 19(1)(g), public interest too is demonstrated
before remedy is sought. Although the threshold for the latter need
not be high, but it is nevertheless essential to prevent bypassing of
civil courts and use of constitutional avenues for enforcement of
contractual obligations.
36. In the present case, although it is clear that the Division
Bench of the High Court was cognizant of these principles
surrounding scope of judicial review, however, it failed to effectively
evaluate whether larger public interest was being affected. On the
contrary, we feel that the interest of Respondent No. 1 was purely
private and monetary in nature.
37. First, AMR-Dev Prabha's initial prayer sought to nullify
the award of contract, which if granted, would have increased the
sums payable by the State instrumentality from Rs 2043 crores to
Rs 2345 crores. Second, the conduct of Respondent No. 1 over the
course of the present proceedings, as highlighted by the appellants,
further bolsters the lack of public interest. Whereas initially the first
respondent was seeking quashing of the LOA issued to
Respondent No. 6 owing to arbitrariness on part of BCCL and on
the ground that sanctity of the auction process had been violated;
later, before the Division Bench, Respondent No. 1 sought to make
a new offer of Rs 1950 Crores. This shows how AMR-Dev Prabha's
priority was only to secure the contract and not to uphold the law or
protect larger public interest.
38. Even otherwise, granting such a prayer means that
Respondent No. 1 would have gotten a special opportunity of
negotiation, to the detriment of all other participants, which would
probably be a more egregious violation of equality envisaged under
Article 14 than the procedural adherence which they were initially
seeking to protect.
39. Additionally, we are not impressed with the first
respondent's argument that there is a certain public interest at
stake whenever the public exchequer is involved. There are various
factors in play, in addition to mere bidding price, like technical ability
and timely completion which must be kept in mind. And adopting
such interpretation would permanently blur the line between
contractual disputes involving the State and those affecting public
law. This has aptly been highlighted in Raunaq International Ltd. v.
IVR Construction Ltd.
Writ Petition Nos.11862/2020 (PIL)
and 13744/2020
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"11. When a writ petition is filed in the High Court
challenging the award of a contract by a public authority
or the State, the court must be satisfied that there is
some element of public interest involved in entertaining
such a petition. If, for example, the dispute is purely
between two tenderers, the court must be very
careful to see if there is any element of public
interest involved in the litigation. A mere difference
in the prices offered by the two tenderers may or
may not be decisive in deciding whether any public
interest is involved in intervening in such a
commercial transaction. It is important to bear in mind
that by court intervention, the proposed project may be
considerably delayed thus escalating the cost far more
than any saving which the court would ultimately effect
in public money by deciding the dispute in favour of one
tenderer or the other tenderer. Therefore, unless the
court is satisfied that there is a substantial amount of
public interest, or the transaction is entered into mala
fide, the court should not intervene under Article 226 in
disputes between two rival tenderers."
(emphasis supplied)
40. Further, the first respondent has failed to demonstrate
which public law right it was claiming. The main thrust of AMR-Dev
Prabha's case has been on the fact that at 1:03PM on 05.05.2015 it
was declared the lowest bidder (or L1). However, being declared
the L-1 bidder does not bestow upon any entity a public law
entitlement to award of the contract, as noted in Maa Binda Express
Carrier v. North-East Frontier Railway:
"8. The scope of judicial review in matters relating
to award of contracts by the State and its
instrumentalities is settled by a long line of decisions of
this Court. While these decisions clearly recognise 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
Writ Petition Nos.11862/2020 (PIL)
and 13744/2020
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tenders are invited are not open to the judicial scrutiny
unless it is found that the same have been tailo-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."
(emphasis supplied)
41. Instead, precedent laid down by this Court in Master
Marine Services (P) Ltd v. Metcalfe & Hodg Kinson (P) Ltd, 10
illustrates that if a prayer for re-bidding is on account of a desire to
get a better price, then involvement of Article 14 of the Constitution
would not be made out.
42. Further, regular recourse was made over the course of
proceedings by learned senior counsel for the first respondent on
terms of the NIT. Findings in the impugned order too were based
upon disputed interpretation of such contractual terms. Thus, it is
clear that there was neither any public law right of the first
respondent which was affected, nor was there any public interest
sought to be furthered.
54. In light of the above discussion, the appeal filed by
Bharat Coking Coal Ltd, as well as connected appeals filed by M/s
RK Transport and M/s C1 India Pvt Ltd, are allowed. Resultantly,
the appeal filed by AMR-Dev Prabha is dismissed. The Division
Bench judgment of the High Court dated 12.04.2018 is set-aside
and the writ petition filed by AMR-Dev Prabha is dismissed. No
order as to costs."
In light of the aforesaid judgment, it is a well settled preposition
of law that scope of judicial review in tender matters is quite limited
and the Courts are not the appellate Courts to sit over in appeal over
the decision of executive authority or instrumentalities.
33- A similar view has been taken by the Hon'ble Supreme Court in
the case of Municipal Corporation, Ujjain Vs. BVG India Ltd.
(Supra). Paragraphs No.9 to 11 of the aforesaid judgment reads as
under:-
"9. The principles which have to be applied in judicial review
of administrative decisions, especially those relating to acceptance
of tender and award of contract, have been considered in great
detail by this Court in Tata Cellular v. Union of India [Tata Cellular v.
Union of India, (1994) 6 SCC 651] , wherein this Court observed
Writ Petition Nos.11862/2020 (PIL)
and 13744/2020
- 21 -
that the principles of judicial review would apply to the exercise of
contractual powers by government bodies in order to prevent
arbitrariness or favouritism. However, there are inherent limitations
in exercise of that power of judicial review. The Government is the
guardian of the finances of the State. It is expected to protect the
financial interest of the State. The right to refuse the lowest or any
other tender is always available to the Government. But, the
principles laid down in Article 14 of the Constitution have to be kept
in view while accepting or refusing a tender. There can be no
question of infringement of Article 14 if the Government tries to get
the best person or the best quotation. The right to choose cannot
be considered to be an arbitrary power. Of course, if the said power
is exercised for any collateral purpose, the exercise of that power
will be struck down.
10. The modern trend points to judicial restraint in
administrative action. The Court does not sit as a court of appeal
but merely reviews the manner in which the decision was made.
The Court does not have the expertise to correct the administrative
decision. If a review of the administrative decision is permitted, it
will be substituting its own decision without the necessary expertise
which itself may be fallible. 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 a quasi-administrative sphere. However,
the decision must not only be tested by the application ofthe
Wednesbury [Associated Provincial Picture Houses v. Wednesbury
Corpn., (1948) 1 KB 223 (CA)] principle of reasonableness, but
must also be free from arbitrariness and not affected by bias or
actuated by mala fides. [See the judgment in Master Marine
Services (P) Ltd. v. Metcalfe & Hodgkinson (P) Ltd. [Master Marine
Services (P) Ltd. v. Metcalfe & Hodgkinson (P) Ltd., (2005) 6 SCC
138] ]
11. In Sterling Computers Ltd. v. M & N Publications Ltd.
[Sterling Computers Ltd. v. M & N Publications Ltd., (1993) 1 SCC
445] , this Court held as under: (SCC p. 458, paras 18 & 19)
"18. While exercising the power of judicial review,
in respect of contracts entered into on behalf of the
State, the Court is concerned primarily as to whether
there has been any infirmity in the "decision-making
process". In this connection reference may be made to
Chief Constable of the North Wales Police v. Evans
[Chief Constable of the North Wales Police v. Evans,
(1982) 1 WLR 1155 : (1982) 3 All ER 141 (HL)] where it
was said that: (WLR p. 1161 : All ER p. 144a)
'... The purpose of judicial review is to ensure
that the individual receives fair treatment, and not to
ensure that the authority, after according fair treatment,
reaches on a matter which it is authorised or enjoined by
law to decide for itself a conclusion which is correct in
the eyes of the court.'
By way of judicial review the court cannot
Writ Petition Nos.11862/2020 (PIL)
and 13744/2020
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examine the details of the terms of the contract which
have been entered into by the public bodies or the
State. The courts have inherent limitations on the scope
of any such enquiry. But at the same time as was said
by the House of Lords in the aforesaid case, Chief
Constable of the North Wales Police v. Evans [Chief
Constable of the North Wales Police v. Evans, (1982) 1
WLR 1155 : (1982) 3 All ER 141 (HL)] the courts can
certainly examine whether "decision-making process"
was reasonable, rational, not arbitrary and violative of
Article 14 of the Constitution.
19. If the contract has been entered into without
ignoring the procedure which can be said to be basic in
nature and after an objective consideration of different
options available taking into account the interest of the
State and the public, then Court cannot act as an
appellate authority by substituting its opinion in respect
of selection made for entering into such contract. But,
once the procedure adopted by an authority for purpose
of entering into a contract is held to be against the
mandate of Article 14 of the Constitution, the courts
cannot ignore such action saying that the authorities
concerned must have some latitude or liberty in
contractual matters and any interference by court
amounts to encroachment on the exclusive right of the
executive to take such decision."
In light of the aforesaid judgment, as in the present case no
mala-fides are involved, the question of interference shall certainly
amounts to encroachment on the exclusive right of the executive to
take such decision.
33- In the case of Montecarlo Limited (Supra) the apex Court in
paragraphs No.19 to 25 has held as under:-
"19. In Sterling Computers Ltd. v. M&N Publications Ltd.
[Sterling Computers Ltd. v. M&N Publications Ltd., (1993) 1 SCC
445] , the Court has held that under some special circumstances a
discretion has to be conceded to the authorities who have to enter
into contract giving them liberty to assess the overall situation for
purpose of taking a decision as to whom the contract be awarded
and at what terms. It has also been observed that by way of judicial
review the Court cannot examine the details of the terms of the
contract which have been entered into by the public bodies or the
State. Courts have inherent limitations on the scope of any such
enquiry.
Writ Petition Nos.11862/2020 (PIL)
and 13744/2020
- 23 -
20. In Tata Cellular [Tata Cellular v. Union of India, (1994) 6
SCC 651] a three-Judge Bench after referring to earlier decisions
culled out certain principles, namely, (a) the modern trend points to
judicial restraint in administrative action, (b) the Court does not sit
as a court of appeal but merely reviews the manner in which the
decision was made, (c) the Court does not have the expertise to
correct the administrative decision. If a review of the administrative
decision is permitted it will be substituting its own decision, without
the necessary expertise which itself may be fallible, and (d) the
Government must have freedom of contract and that permits a fair
play in the joints as a necessary concomitant for an administrative
body functioning in an administrative sphere or quasi-administrative
sphere. Hence, the Court has laid down that the decision must not
only be tested by the application of the Wednesbury principle
[Associated Provincial Picture Houses Ltd. v. Wednesbury Corpn.,
(1948) 1 KB 223 (CA)] of reasonableness (including its other facts
pointed out above) but must be free from arbitrariness not affected
by bias or actuated by mala fides.
21. In Jagdish Mandal v. State of Orissa [Jagdish Mandal v.
State of Orissa, (2007) 14 SCC 517] the Court has held that: (SCC
p. 531, para 22)
"22. ... 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."
22. In Master Marine Services (P) Ltd. v. Metcalfe &
Hodgkinson (P) Ltd. [Master Marine Services (P) Ltd. v. Metcalfe &
Hodgkinson (P) Ltd., (2005) 6 SCC 138] , it has been ruled that
(SCC p. 148, para 15) the State can choose its own method to
arrive at a decision and it is free to grant any relaxation for bona
fide reasons, if the tender conditions permit such a relaxation. It has
been further held that the State, its corporations, instrumentalities
and agencies have the public duty to be fair to all concerned. Even
when some defect is found in the decision-making process, the
Court must exercise its discretionary powers under Article 226 with
great caution and should exercise it only in furtherance of public
interest and not merely on the making out of a legal point.
23. In B.S.N. Joshi & Sons Ltd. v. Nair Coal Services Ltd.
[B.S.N. Joshi & Sons Ltd. v. Nair Coal Services Ltd., (2006) 11 SCC
548] a two-Judge Bench, after referring to series of judgments has
culled out certain principles which include the one that where a
decision has been taken purely on public interest, the Court
ordinarily should apply judicial restraint.
24. In Michigan Rubber (India) Ltd. [Michigan Rubber (India)
Ltd. v. State of Karnataka, (2012) 8 SCC 216] the Court referred to
the earlier judgments and opined that before a court interferes in
tender or contractual matters, in exercise of power of judicial
Writ Petition Nos.11862/2020 (PIL)
and 13744/2020
- 24 -
review, it should pose to itself the question 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 judicial conscience
cannot countenance. The emphasis was laid on the test, that is,
whether award of contract is against public interest.
25. Recently in Afcons Infrastructure Ltd. v. Nagpur Metro
Rail Corpn. Ltd. [Afcons Infrastructure Ltd. v. Nagpur Metro Rail
Corpn. Ltd., (2016) 16 SCC 818 : (2016) 8 Scale 765] a two-Judge
Bench eloquently exposited the test which is to the following effect:
"We may add that the owner or the employer of a
project, having authored the tender documents, is the
best person to understand and appreciate its
requirements and interpret its documents. The
constitutional courts must defer to this understanding
and appreciation of the tender documents, unless there
is mala fide or perversity in the understanding or
appreciation or in the application of the terms of the
tender conditions. It is possible that the owner or
employer of a project may give an interpretation to the
tender documents that is not acceptable to the
constitutional courts but that by itself is not a reason for
interfering with the interpretation given."
The Hon'ble Supreme Court in the aforesaid case has held that
a contract is a commercial transaction. Evaluating tenders and
awarding contracts are essentially commercial functions. If a decision
relating to award is bona-fide and in public interest, Court will not
exercise the power of judicial review. In the present case, the decision
taken by the Company is a decision taken during the COVID-19
Pandemic keeping in view various factors and no mala-fides involved
in the matter. In fact by issuing the fresh tender as argued by learned
Senior Counsel, the State exchequer is being subjected to financial
gain as the commission / concession which is being now paid is less
then the commission / concession which was being paid earlier.
34- The Hon'ble Supreme Court in the case of Tamilnadu
Generation and Distribution Corporation Ltd. (Supra) has again
Writ Petition Nos.11862/2020 (PIL)
and 13744/2020
- 25 -
dealt with the the scope of interference in contractual matters and has
held that Courts should not sit in appeal over financial consultant's
assessment.
35- In the case of JSW Infrastructure Limited (Supra), the apex
Court in paragraph No.8 to 10 has held as under:-
"8. We may also add that the law is well settled that superior
courts while exercising their power of judicial review must act with
restraint while dealing with contractual matters. A three-Judge
Bench of this Court in Tata Cellular v. Union of India [Tata Cellular v.
Union of India, (1994) 6 SCC 651] held that:
(i) there should be judicial restraint in review of
administrative action;
(ii) the court should not act like court of appeal; it
cannot review the decision but can only review
the decision-making process;
(iii) the court does not usually have the necessary
expertise to correct such technical decisions;
(iv) the employer must have play in the joints i.e.
necessary freedom to take administrative
decisions within certain boundaries.
9. In Jagdish Mandal v. State of Orissa [Jagdish Mandal v.
State of Orissa, (2007) 14 SCC 517] this Court held that evaluation
of tenders and awarding contracts are essentially commercial
functions and if the decision is bona fide and taken in the public
interest the superior courts should refrain from exercising their
power of judicial review. In the present case there are no
allegations of mala fides and the appellant consortium has offered
better revenue sharing to the employer.
10. In Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corpn.
Ltd. [Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corpn. Ltd.,
(2016) 16 SCC 818] this Court held as follows: (SCC pp. 825-26,
paras 13 & 15-16)
"13. ... a mere disagreement with the decision-
making process or the decision of the administrative
authority is no reason for a constitutional court to
interfere. The threshold of mala fides, intention to favour
someone or arbitrariness, irrationality or perversity must
be met before the constitutional court interferes with the
decision-making process or the decision.
***
15. We may add that the owner or the employer of a project, having authored the tender documents, is the best person to understand and appreciate its Writ Petition Nos.11862/2020 (PIL) and 13744/2020
- 26 -
requirements and interpret its documents. The constitutional courts must defer to this understanding and appreciation of the tender documents, unless there is mala fide or perversity in the understanding or appreciation or in the application of the terms of the tender conditions. It is possible that the owner or employer of a project may give an interpretation to the tender documents that is not acceptable to the constitutional courts but that by itself is not a reason for interfering with the interpretation given.
16. In the present appeals, although there does not appear to be any ambiguity or doubt about the interpretation given by Nmrcl to the tender conditions, we are of the view that even if there was such an ambiguity or doubt, the High Court ought to have refrained from giving its own interpretation unless it had come to a clear conclusion that the interpretation given by Nmrcl was perverse or mala fide or intended to favour one of the bidders. This was certainly not the case either before the High Court or before this Court." The view taken in Afcons [Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corpn. Ltd., (2016) 16 SCC 818] was followed in Montecarlo Ltd. v. NTPC Ltd. [Montecarlo Ltd. v. NTPC Ltd., (2016) 15 SCC 272] Thus it is apparent that in contractual matters, the writ courts should not interfere unless the decision taken is totally arbitrary, perverse or mala fide."
In the aforesaid case, it has been held that writ Courts should not interfere unless the decision taken is totally arbitrary, preserve or mala-fide. In the case of AMI Art Creations and Offset Printers (Supra) a similar view has been taken.
36- The petitioners have not been able to point out any mala-fide.
The Competent Authority was competent to annul the tender keeping in view the Clause-28.1. The same has been done in the larger public interest. The terms of the tender notice are not at all wholly arbitrary, discriminatory or actuated by malice. Hence, they cannot be subjected to judicial review.
37- This Court in the case of Indermani Mineral (India) Private Writ Petition Nos.11862/2020 (PIL) and 13744/2020
- 27 -
Limited Vs. The State of Madhya Pradesh and Two Others (Writ Petition No.25000/2019, decided on 06/02/2020), which was again a case relating to challenge to the tender conditions, in paragraphs No.61 to 81 has held as under:-
61. The scope of judicial scrutiny has been considered by the Hon'ble Apex Court time and again. In the case of Afcons Infrastructure Limited v/s Nagpur Metro Rail Corporation Limited reported in 2016 (16) SCC 818, the Apex Court has held as under:-
"We may add the owner or the employer of a project, having authored the tender documents, is the best persons to understand and appreciate its requirements and interpret its documents. The constitutional Courts must defer to this understanding and appreciation of the tender documents, unless there a malafide or perversity in the understanding or appreciation or in the application of the terms of the tender conditions. It is possible that the owner of employer of a project may give an interpretation to the tender documents that is no acceptable to the constitutional Courts but that by itself is not a reason for interfering with the interpretation given".
62. The Apex Court in the case of Reliance Telecom Limited & Others v/s Union of India & Others reported in 2017 (4) SCC 269 has again dealt with scope of interference in respect of the tender.
63. In the case of Tata Cellular v/s Union of India reported in 1994 (6) SCC 651 again the scope of judicial review has been looked into by the Hon'ble Apex Court. In the aforesaid case, it has been held that the terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to tender is in the realm of contract and the Government must be allowed to have a fair play in the joints as it is a necessary concomitant for an administrative body functioning in an administrative sphere or quasi-administrative sphere.
64. The Apex Court in the case of MonarchInfrastructure (P) Limited v/s Ulhasnagar Municipal Corporation & Others reported in 2000 (5) SCC 287 was again dealing with the N.I.T. And it has been held that it cannot say whether the conditions are better than what were prescribed earlier, for in such matters, the authority calling the tenders is the best judge. The Court declined to restore status quo ante.
65. In the case of Cellular Operator Association of India & Others v/s Union of India & Others reported in 2003 (3) SCC 186, the Apex Court has held that in respect of the matters affecting policy and those that require technical expertise, the Court should Writ Petition Nos.11862/2020 (PIL) and 13744/2020
- 28 -
show deference to, and follow the recommendations of the Committee which is more qualified to address the issues.
66. The Apex in the case of Association of Registration Plates v/s Union of India & Others reported in 2005 (1) SCC 679 has held that formulating conditions of a tender document and awarding a contract of the nature of those for supply of HSVRPs, greater latitude is required to be conceded to the state authorities.
67. In the case of Union of India v/s Hindustan Development Corporation reported in 1993 (3) SCC 499, again the scope of judicial interference has been dealt with.
68. In the case of Tata Cellular v/s Union of India reported in 1994 (6) SCC 651, it has been held that mere power to choose cannot be termed arbitrary. The Government has an interest in selecting the best and use of such power for collateral purpose is interdicted by Article 14 of the Constitution of India.
69. In the case of Maa Binda Express Carrier & Another v/s Northeast Frontier Railway & Others reported in 2014 (3) SCC 760, it has been held that the bid / tender, in response to a NIT, is only an offer which State or its agencies are under no obligation to accept. It has been further held that bidders participating in the tender process cannot insist that their bids should be accepted simply because a bid is highest or lowest.
70. In the case of Municipal Corporation, Ujjain & Others v/s BVG India Limited & Others reported in 2018 (5) SCC 287, it has been held that the terms of the tender are not open for judicial scrutiny as the invitation to tender is a matter of contract.
71. In the case of Monarch Infrastructure (P) Limited v/s Commissioner, Ulhasnagar Municipal Corporation & Others reported in 2000 (5) SCC 287, it has been held that the best judge to determine, whether the revised terms and conditions of the tender process were better than the earlier ones, is the authority who has invited the tender and not the Court.
72. In the case of Directorate of Education & Others v/s Educomp Datamatics Limited & Others reported in 2004 (4) SCC 19, it has been held that the terms of initiation to tender are not open to the judicial scrutiny the same being in the realm of contract. It has been further held that the Government must have a free hand in setting the terms of the tender.
73. In the case of Air India Limited v/s Cochin International Airport Limited reported in (2000) 2 SCC 617, it has been held that award of a contract, whether it is by a private party or by public body or the State, is essentially a commercial transaction. It has further been held that commercial decision considerations, which are paramount, are commercial considerations and 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.
74. In the case of Master Marine Services (P) Limited v/s Metcalfe & Hodkinson (P) Limited & Another reported in (2005) Writ Petition Nos.11862/2020 (PIL) and 13744/2020
- 29 -
6 SCC 138, it has been held that the State can choose its own method to arrive at a decision and the State and its instrumentalities have duty to be fair to all the concerned. It has been further held that even when some defect is found in decision making process, Court must exercise its extraordinary writ jurisdiction with great caution and that too in furtherance of public interest and larger public interest in passing an order of intervention is always a relevant consideration.
75. In the case of Haryana Urban Development Authority & Others v/s Orchid Infrastructure Developers Private Limited reported in (2017) 4 SCC 243, it has been held that if the State or its instrumentalities act reasonably, fairly and in public interest in awarding the contract, the interference by the Court is very restrictive since no person can claim Fundamental right to carry on business with the Government.
76. In the case of Reliance Telecom Limited & Another v/s Union of India & Another reported in (2017) 4 SCC 269, it has been held that in the matter relating to complex auction procedure having enormous financial ramification, the interference by the Courts based upon any perception, which is though to be wise or assumed to be fair, can lead to a situation which is not warrantable and may have unforeseen adverse impact.
77. In the case of Meenakshi Mills Limited v/s Union of India reported in (1974) 1 SCC 468, it has been held whether there is any unfairness involved in determining, 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 point of time, enter into judicial verdict. It has further been held that the unreasonableness of the legitimate expectation has to be determined with respect to the circumstances relating to the trade of business in question.
78. In the case of Lala Hari Chand Sarda v/s Mizo District Council & Another reported in (1967) 1 SCR 1012, it has been held that 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.
79. In the case of Krishnan Kakkanth v/s Government of Kerela & Others reported in (1997) 9 SCC 495, it has been held that a citizen has no Fundamental Right to insist on Government or any other individual to do business with him and the Government is entitled to enter into business with any person or class of persons to the exclusion of others.
80. In the case of Global Energy Limited & Another v/s Adani Exports Limited & Others reported in (2005) 4 SCC 435, it has been held that unless terms of a tender notice are wholly arbitrary, discriminatory or actuated by malice, are not subject to judicial review. It has further been held that principle is, therefore, well settled that the terms of the invitation to tender are not open to judicial scrutiny and the Courts cannot whittle down the terms of the Writ Petition Nos.11862/2020 (PIL) and 13744/2020
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tender as they are in the realm of contract unless they are wholly arbitrary, discriminatory or actuated by malice.
81. This Court does not find any reason to interfere with the tender in the peculiar facts and circumstances of the case. The Governments and their undertakings do have free hand in setting terms of the tender and unless the terms and conditions are arbitrary, discriminatory, malafide or actuated by bias, the scope of interference by Courts does not arise as held in the case of Michigan Rubber (India) Limited (supra)."
38- In light of the aforesaid, as no illegality of any kind has been committed by the respondents in annulling the first tender, and thereafter, issuing a second tender notice, the terms and conditions are not arbitrary, discriminatory or actuated by malice, the question of interference by this Court in the peculiar facts and circumstances of the case does not arise. Accordingly, both the writ petitions are dismissed. No order as to costs.
Certified copy as per rules.
(S. C. SHARMA) (SHAILENDRA SHUKLA)
JUDGE JUDGE
Tej
Digitally signed by
Tej Prakash Vyas
Date: 2020.11.05
13:17:06 +05'30'