Judgment :- COMMON ORDER Since the issues raised in all these writ petitions are one and the same, they are taken up together for disposal by this common order. 2. The petitioners are small and medium transport operators having been registered with the respondent Bharat Heavy Electricals Limited (in short "BHEL") for transportation of raw materials to the fabrication shops at Trichy and Ranipet from Chennai Harbour as well as moving the finished boilers and other accessories to various thermal plants situate all over the country. Most of the operators run the above business for more than 15 to 20 years. The contracts were awarded for utilising the services of the transport carriers. In the year 1999, BHEL issued a public notice calling applications from the transport fleet owners for registration for the purpose of undertaking transport of smalls/parcels/full lorry/trailer/ over dimensional loads from the respondent BHEL complex at Trichy to various destinations in India and vice versa. The following are the requirements for registration:- (i) Experience of not less than 3 years in transportation of consignments similar to BHEL's requirements. (ii) Indian Banks' Association membership valid for a minimum period of one year from the date of application. (iii) Minimum 10 lorries/5 open trucks/5 trailers/higher capacity/special vehicles relevant to each category applied for, in operation, owned by the firm or in the name of the partner/directors/proprietor with valid All India permits for all vehicles. (iv) Branch offices at Trichy, Ranipet and Chennai in addition to branches all over India. Almost about 46 fleet owners who satisfied the terms and conditions stipulated in the public notice were permitted to act as transport carriers. On 12.11.2002, the BHEL issued another public notice calling for applications. The minimum requirements as stipulated in the said notice are as follows:- (i) Experience of not less than three years in transportation of consignments similar to BHEL's requirements. (ii) Indian Banks' Association membership currently valid. (iii) Minimum no. of vehicles required for registration. -------------------------------------------------------- Sl.No. Category of Capacity of Minimum no. of Load Vehicle vehicles required -------------------------------------------------------- 01 Smalls/Part/ upto 9 tons 10 nos. Full Lorry load 02 Open truck 9 tons 5 nos. 03 Trailer load from 15 to 5 nos. 20 tons 04 Over dimensional from 20 to 1 no. load 60 tons -------------------------------------------------------- To carry high width material. -------------------------------------------------------- Sl.No. Category of Capacity of Minimum no. of Load Vehicle vehicles required -------------------------------------------------------- 01 Smalls/Part/ upto 9 tons 10 nos. Full Lorry load 02 Open truck 9 tons 5 nos. 03 Trailer load from 15 to 5 nos. 20 tons 04 Over dimensional from 20 to 1 no. load 60 tons -------------------------------------------------------- To carry high width material. (iv) The vehicles should be owned by the firm or in the name of the parner/directors/proprietor with currently valid documents viz., R.C., Inter-State, Permit, Insurance Certificate, Road Tax Receipt, Fitness Certificate for all vehicles. (v) Branch offices at Trichy, Ranipet and Chennai. In addition to these, branch/contact offices in various States as specified in the application for the respective category. 3. In response to the said notice, nearly 70 fleet operators submitted their applications for registration. Without considering those applications, BHEL again issued another public notice dated 12.7.2003 calling for applications from the transport carriers for registration on the following requirements:- (i) Currently valid Indian Banks' Association membership. (ii) BHEL requires the following types of vehicles for transporting their consignments on a monthly basis. ------------------------------------------------- Sl.No. Category Minimum vehicles Reqd. ------------------------------------------------- I Lorry including 15 open truck II Trailer including 10 ODC ------------------------------------------------- (iii) Number of branch offices on All India Basis = minimum 100 covering all States where BHEL sites are situated. (iv) Annual turnover: Minimum Rs.50 crores average of last three years. (v) Availability of Branches in all the on going sites of BHEL, Tiruchirappalli (For details ref.Application) (vi) Experience: NOT LESS THAN 5 YEARS in transporting similar materials for Heavy Industries like BHEL and other Public Sector companies, using OWN or Associates vehicles. (vii) Web based Vehicle Tracking System and Internet facility. (viii) The availability of e-Connectivity in three branches at Trichy, Chennai and Ranipet in addition to their Head Office and all major branches. The petitioners are aggrieved with the requirement nos.(iii) and (iv) of the public notice dated 12.7.2003. 4. Mrs.Nalini Chidambaram, learned Senior Counsel appearing for the petitioner in W.P.No.21817 of 2003 submitted that so far as the said petitioner is concerned, it has 25 years of experience, owns 13 trailers, has 90 employees and 15 branches throughout India. Insofar as requirement no. 4. Mrs.Nalini Chidambaram, learned Senior Counsel appearing for the petitioner in W.P.No.21817 of 2003 submitted that so far as the said petitioner is concerned, it has 25 years of experience, owns 13 trailers, has 90 employees and 15 branches throughout India. Insofar as requirement no. (iii) of the public notice dated 12.7.2003, the learned Senior Counsel submitted that in paragraph 22 of the counter affidavit this requirement is dispensed with and not insisted, as the minimum 100 number of branch offices is restricted only for temporary branches. Moreover, considering the fact that the petitioner had successfully carried on their operations for almost 25 years, the insistence of 100 number of branch offices on all India basis is only to deprive the petitioner from registering its name for the contract and only to accommodate a few of the fleet owners. Insofar as the requirement no.(iv), the learned Senior Counsel submitted that the value of the contract itself is Rs.40 crores. Hence, insistence of minimum annual turnover of Rs.50 crores is totally unreasonable, has no nexus to the contract and included only to create monopoly for few fleet owners. Out of 70 persons eligible for registration, by this condition only 8 persons were made eligible. 5. Dr.P.Vasudevan for M/s Malini and Mangai, learned counsel appearing for the petitioners in the other writ petitions would also submit that the inclusion of requirements (iii) and (iv) is mala fide, as most of the fleet owners who had the benefit of the registration for transporting the materials to and from the BHEL, Trichy to all over the country are deprived and only 8 persons are made entitled for registration. The learned counsel extensively relied upon the judgment of the Apex Court in "TATA CELLULAR v. UNION OF INDIA ( 1994 (6) SCC 651 )" to contend that while the Court cannot interfere in the Government's freedom of contract, invitation of tender and refusal of any tender which pertains to policy matter, nevertheless, it could review if the decision/action taken is vitiated by arbitrariness, unfairness, illegality, irrationality or Wednesbury unreasonableness. The Court could also interfere when the decision amounts to favouritism and nepotism. The learned counsel would also rely upon the judgment of the Apex Court in "M/S MONARCH INFRASTRUCTURE (P) LTD. v. COMMISSIONER, ULHASNAGAR MUNICIPAL CORPORATION AND OTHERS ( AIR 2000 SC 2272 )" for the above submission. The Court could also interfere when the decision amounts to favouritism and nepotism. The learned counsel would also rely upon the judgment of the Apex Court in "M/S MONARCH INFRASTRUCTURE (P) LTD. v. COMMISSIONER, ULHASNAGAR MUNICIPAL CORPORATION AND OTHERS ( AIR 2000 SC 2272 )" for the above submission. He would also rely upon the judgment of Delhi High Court in "NESTOR PHARMACEUTICALS LTD. v. UNION OF INDIA (2003 (10) ILD 305)" to contend that even in the matter of tenders that the Government should act in a fair manner and in the absence of a fair play, Court could intervene in such decision. 6. Mr.T.R.Rajagopalan, learned Senior Counsel appearing for the respondent-BHEL would submit that there is absolutely no arbitrariness, unfairness, illegality or irrationality in the impugned requirements in the tender. He would submit that after the public notice dated 12.11.2002 was issued, due to the non-placement of vehicles by the existing transport carriers who were registered, the delivery schedule could not be adhered. In order to solve the problem, the BHEL management held several meetings with the registered transport carriers and the inconvenience caused to the BHEL management on account of non-placement of vehicles was expressed and the fleet operators were requested to replace the vehicles. In spite of repeated requests, the transport carriers did not come forward to keep the time schedule in placement of vehicles to the satisfaction of BHEL management. Only in the circumstances and in order to ensure the time delivery, the two requirements were imposed. There is nothing unreasonable in imposing the said requirements. Merely because, by the said requirements, some of the transport operators are excluded from registration, the requirements themselves would become illegal. The learned Senior Counsel submitted that the scope of judicial review in the matter of contract is very limited. In this context, the learned Senior Counsel relied upon the following judgments of the Apex Court:- (1) "G.B.MAHAJAN AND OTHERS v. JALGAON MUNICIPAL COUNCIL AND OTHERS ( 1991 (3) SCC 91 )". (2) "STERLING COMPUTERS LTD. v. M/S M & N PUBLICATIONS LTD. AND OTHERS ( AIR 1996 SC 51 )". (3) "ASIA FOUNDATION & CONTRUCTION LTD. v. TRAFALGAR HOUSE CONSTRUCTION (I) LTD. AND OTHERS ( 1997 (1) SCC 738 )" and (4) "UNION OF INDIA AND ANOTHER v. INTERNATIONAL TRADING CO. AND ANOTHER ( 2003 (5) SCC 437 )". 7. (2) "STERLING COMPUTERS LTD. v. M/S M & N PUBLICATIONS LTD. AND OTHERS ( AIR 1996 SC 51 )". (3) "ASIA FOUNDATION & CONTRUCTION LTD. v. TRAFALGAR HOUSE CONSTRUCTION (I) LTD. AND OTHERS ( 1997 (1) SCC 738 )" and (4) "UNION OF INDIA AND ANOTHER v. INTERNATIONAL TRADING CO. AND ANOTHER ( 2003 (5) SCC 437 )". 7. I have given my due consideration to the rival submissions. Insofar as the scope of judicial review in contractual matters, the power is restricted to the following as held by the Apex Court in Tata Cellular's case (supra). (1) Whether a decision-making authority exceeded its powers? (2) Committed an error of law, (3) committed a breach of the rules of natural justice, (4) reached a decision which no reasonable tribunal would have reached or, (5) abused its powers. In G.B.Mahajan and others case (supra), the Apex Court while considering the principle of judicial review has held as follows:- "With the expansion of the State's presence in the field of trade and commerce and of the range of economic and commercial enterprises of government and its instrumentalities there is an increasing dimension to governmental concern for stimulating efficiency, keeping costs down, improved management methods, prevention of time and cost overruns in projects, balancing of costs against time scales, quality control, cost-benefit ratios etc. In search of these values it might become necessary to adopt appropriate techniques of management of projects with concomitant economic expediencies. These are essentially matters of economic policy which lack adjudicative disposition, unless they violate constitutional or legal limits on power or have demonstrable pejorative environmental implications or amount to clear abuse of power. In search of these values it might become necessary to adopt appropriate techniques of management of projects with concomitant economic expediencies. These are essentially matters of economic policy which lack adjudicative disposition, unless they violate constitutional or legal limits on power or have demonstrable pejorative environmental implications or amount to clear abuse of power. This again is the judicial recognition of administrator's right to trial and error, as long as both trial and error are bona fide and within the limits of authority." In Sterling Computers Limited case (supra), the Apex Court has held as follows:- "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 the case of Chief Constable of the North Wales Police v. Evans (1982) 3 All ER 141, where it was said that "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 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. 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 (supra), the Courts can certainly examine whether "decision making process" was reasonable, rational, not arbitrary and violative of Art.14 of the Constitution. 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 Art.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 Asia Foundation and Construction Limited case (supra), the Apex Court while considering the scope of judicial review has held as follows:- "Therefore, though the principle of judicial review cannot be denied so far as exercise of contractual powers of government bodies are concerned, but it is intended to prevent arbitrariness or favouritism and it is exercised in the larger public interest or if it is brought to the notice of the court that in the matter of award of a contract power has been exercised for any collateral purpose. But on examining the facts and circumstances of the present case and on going through the records we are of the considered opinion that none of the criteria has been satisfied justifying Court's interference in the grant of contract in favour of the appellant." In Union of India v. International Trading Co. case (supra), the Apex Court has held as follows:- "The basic requirement of Article 14 is fairness in action by the State, and non-arbitrariness in essence and substance is the heartbeat of fair play. Actions are amenable, in the panorama of judicial review only to the extent that the State must act validly for a discernible reason, not whimsically for any ulterior purpose. The meaning and true import and concept of arbitrariness is more easily visualized than precisely defined. A question whether the impugned action is arbitrary or not is to be ultimately answered on the facts and circumstances of a given case." 8. The meaning and true import and concept of arbitrariness is more easily visualized than precisely defined. A question whether the impugned action is arbitrary or not is to be ultimately answered on the facts and circumstances of a given case." 8. A survey of the above judgments would show that the Court (1) cannot act as appellate authority and examine details of terms of contract, (2) power of judicial review is restricted only when the decision or action of the State is vitiated by arbitrariness, unfairness, illegality, irrationality or Wednesbury unreasonableness viz., when decision is such as no reasonable person on proper application of mind could take or procedural impropriety, can be looked into by court, (3) the terms of the invitation of tender cannot be open to judicial scrutiny as the invitation to tender is in the realm of contract, (4) abuse of power and (5) whether a decision making authority exceeded its powers. 9. On the above settled principles of law, the facts of this case, as presented, should be looked into. Till the impugned public notice dated 12.7.2003 was issued, the respondent-BHEL did not insist minimum 100 number of branch offices on all India basis and the further requirement of annual turnover of minimum of Rs.50 crores for the last three years. After the issue of public notice dated 12.11.2002, registration of the transport carriers were made on the basis of the recommendations of a specially constituted committee. In view of the validity of All India Transport Rate Contracts finalised was for a period upto 31.12.2002 and the registration should be done periodically, fresh public notice was necessitated for registration of transport carriers. It was found that due to non-placement of vehicles by the carriers, the respondent-BHEL faced inconvenience in delivery of goods within the prescribed time. To alleviate the situation, meetings of the registered transport carriers were called on 21.2.2003, 6.3.2003, 12.3.2003, 3.4.2003, 7.4.2003 and 2.5.2003 and the inconvenience caused to the respondent-BHEL was highlighted. Though the transport carriers had promised to replace the vehicles as required by the respondent-BHEL to ensure timely delivery of the goods, they did not do so. In fact the respondent-BHEL expressed its dissatisfaction and communicated that action will be initiated for delisting all the carriers for non-performance of the obligation to place the vehicles in time. Though the transport carriers had promised to replace the vehicles as required by the respondent-BHEL to ensure timely delivery of the goods, they did not do so. In fact the respondent-BHEL expressed its dissatisfaction and communicated that action will be initiated for delisting all the carriers for non-performance of the obligation to place the vehicles in time. Nevertheless, the delay in delivery of consignments by the carriers had caused consequential effects on the transaction of the respondent-BHEL. To sustain the above plea, the respondent-BHEL has given the following details:- --------------------------------------------------------- S.No. Name of carriers No.of delayed Penalty consignments deducted --------------------------------------------------------- 01 ABC 3 13646 02 ABRC 38 26338 03 ABRL 1 1666 04 AIM 4 29534 05 AR 7 6895 06 ATO 11 4778 07 BRL 5 16190 08 EIT 17 7253 09 ETO 28 27211 10 GIR 6 3381 11 GPT 12 3875 12 IACT 9 4352 13 IRC 23 23810 14 KAM 8 8004 15 KATA 8 14543 16 KATC 1 716 17 KERA 22 13306 18 KRL 4 14422 19 KRW 1 2857 20 KTC 27 18717 21 KVT 6 9579 22 MGM 1 1298 23 NSIT 1 10402 24 NTC 1 6520 25 ODIC 9 47217 26 PCC 70 82816 27 PION 13 5045 28 PREM 4 3067 29 RIL 2 1458 30 ROCI 32 14690 31 SAT 10 15851 32 SENT 13 15431 33 SER 4 2758 34 SICA 3 16321 35 SJLT 5 9264 36 SKAM 13 16872 37 SKT 10 4935 38 SMRT 4 6266 39 SSAK 17 19199 40 SSC 7 15433 41 PCI 4 41238 42 TMM 16 50981 43 URL 4 4374 --------------------------------------------------------- The names of the petitioners also find place in the said list. According to the respondent-BHEL, for the period of five months from 1.4.2003 to 25.9.2003, as many as 484 instances of delayed delivery were noticed which resulted in a deduction of Rs.6,42,509/-. Only in order to ensure the delivery of consignment in time and to avoid the monetary loss to the respondent-BHEL, the two requirements were imposed. Insofar as the requirement no.(iii) is concerned, it refers to minimum 100 branch offices on all India basis. It is clarified by the respondent-BHEL in the counter affidavit that instead of permanent branch offices, temporary branches are sufficient. Insofar as the requirement no.(iii) is concerned, it refers to minimum 100 branch offices on all India basis. It is clarified by the respondent-BHEL in the counter affidavit that instead of permanent branch offices, temporary branches are sufficient. Thus branch offices are required to ensure that in the event of break down or other factors resulting in delayed delivery may not recur as the defect could be immediately rectified, if branch offices are located. By the said requirements, it cannot be contended that they were included only to eliminate the local transport operators. When the inclusion of requirements is justified with reasons, it cannot be termed as unreasonable. For the same reason, the decision of the respondent-BHEL in including the requirement (iii) in the impugned public notice dated 12.7.2003 cannot be called as arbitrary, unfair, illegal or irrational. In view of the limited scope of judicial review and in view of the fact that this Court cannot enter into the freedom of contract, invitation of tender, etc., of the respondent-BHEL, as the same pertains to policy matter, I am unable to accept the challenge to the inclusion of the said requirement in the public notice. 10. I am also unable to accept the challenge to requirement (iv), whereby a minimum of Rs.50 crores of annual turnover for the last three years is prescribed. Though the contract is for a value of Rs.40 crores, the insistence of the annual turnover of Rs.50 crores for the last three years is again to ensure the timely delivery of the consignments. The said requirement is imposed only to improve the efficient, economic and effective implementation of the contract. It is only a pre-requisite qualification. Such requirement is only in the public interest. The imposition of such requirement is only to meet the national requirement without sacrificing the timely delivery to various State Electricity Boards throughout the country as well as the international customers. The contention that the requirement has been imposed only to eliminate the petitioners cannot be accepted, as the said requirement has been imposed only in the interest of the respondent-BHEL and also in the public interest. 11. Though an argument was advanced on the ground of favouritism and nepotism, unless strong grounds are made out with details, this Court cannot sustain those grounds. 11. Though an argument was advanced on the ground of favouritism and nepotism, unless strong grounds are made out with details, this Court cannot sustain those grounds. Except by pleading that out of the total transport carriers hitherto engaged by the respondent-BHEL for all these years, by the inclusion of (iii) and (iv) requirements, only 8 contractors were made eligible, no further details are given. As already noted, by the imposition of new requirements, if the petitioners are excluded, that cannot be a ground per se to question the requirements on the ground of favouritism and nepotism, especially when the requirements so imposed are only in the interest of the respondent-BHEL and no personal allegations are made against the officials in imposing such requirements. Hence, the challenge on the ground of favouritism and nepotism is also unsustainable. 12. For all the above reasons, I do not find any merit in the grievances espoused by the petitioners. Accordingly, all the writ petitions fail and the same are dismissed. No costs. Consequently, W.P.M.P.Nos.27829 and 31202 of 2003 are also dismissed.