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2004 DIGILAW 268 (GAU)

North Eastern Trade International v. Hindustan Paper Corporation Ltd.

2004-04-08

AMITAVA ROY

body2004
JUDGMENT Amitava Roy, J. 1. Want of fairness and transparency in the decision making process pertaining to the settlement of contract for supply of 1,60,000 MT of Meghalaya coal under the Hindustan Paper Corporation Ltd. (herein after called as "the Corporation"), is what the Petitioner alleges in the instant proceeding. 2. In view of the urgency expressed by the learned Counsel for the parties, pleadings, were exchanged at the motion stage and the matter was heard immediately thereafter. 3. I have heard Mr. N. Dutta, learned senior Counsel, assisted by Mr. R. Sekhar, Advocate for the Petitioner, Mr. A.K. Phukan, learned senior Counsel, assisted by Mr. J. Roy, Advocate for the Corporation and Mr. K.N. Choudhury, learned senior Counsel, assisted by Mr. F. Ahmed, Advocate for the newly impleaded Respondents, the other bidders. 4. Taking a stock of the pleaded facts is necessary. The Petitioner firm claims to be the owner of four coal mines in Meghalaya and is the lessee of three other as well. According to it, it has knowledge in the business of exporting coal from Meghalaya to Bangladesh and had in the last financial year exported more than 6,000 MT of coal from its own coal mines at Meghalaya. A certificate issued by the Syndicate Bank, Shillong, dated 24.1.2004 has also been annexed to the writ petition. The Respondent Corporation invited sealed bids under two part system, Part-1, Techno Commercial Bid and Part-11 Price Bid from the reputed and experienced coal mine owners/coal mine operators/trade licence holders for supply of 1,60,000 MT of Meghalaya coal on annual rate contract basis by its Notice Inviting Bid (herein after referred to as "the NIB") dated 10.1.2004 and 6.2.2004 was fixed for opening of the Techno Commercial Bids. The Petitioner finding itself to be eligible in terms of the pre-qualifying conditions set out in the NIB, submitted its bid enclosing the relevant documents. Altogether 12 bidders including the Petitioner participated in the process. As scheduled, the Techno Commercial bids were opened on 6.2.2004. The Petitioner finding itself to be eligible in terms of the pre-qualifying conditions set out in the NIB, submitted its bid enclosing the relevant documents. Altogether 12 bidders including the Petitioner participated in the process. As scheduled, the Techno Commercial bids were opened on 6.2.2004. On objection raised by one of the bidders at that time that the Petitioner had not submitted the documents regarding its past experience of having supplied at least 6,000 MT coal to any industrial unit of repute during any of the three preceding calendar years, being a pre-qualifying condition, the Petitioner on 10.2.2004 submitted an application refuting the above contention, but offered to submit more documents, if necessary. The Petitioner was not intimated about the fate of its Techno Commercial bid and the Price bids of the other 11 bidders were opened on 14.2.2004. As per the two bid system, price Bids of the bidders, whose Techno Commercial Bids are found to be valid, are only to be opened Being apprehensive, the Petitioner's representative made necessary inquiries with the Corporation and was informed on 17.2.2004 that its bid was likely to be rejected for want of necessary experience documents. Faced with that situation, the Petitioner submitted a representation on 20.4.2004, addressed to the Chairman-cum-Managing Director of the Corporation requesting his intervention. According to the Petitioner, the impugned action of the Corporation in not opening its price bid is illegal, arbitrary and discriminatory inasmuch as it having qualified in all respects with its Techno Commercial Bid, there was no justifiable reason in support thereof. It has been further contended that the price bid, quoted by the Petitioner was much lower than the lowest bid found on opening the other price bids and that there would be price difference of about Rs. 1.5 crore per annum in case the Petitioner's bid is accepted. The Petitioner has alleged that the impugned action is prompted by extraneous considerations inasmuch as the other bidders whose price bids have been opened, have been supplying coal to the Corporation for last 12 years and that they had formed a cartel to exclude it from the fray. 5. In its counter, the Respondent corporation while refuting the claim of the Petitioner that it had fulfilled the pre-qualifying condition of past experience, has pleaded that the Petitioner had failed to furnish any document in support thereof. 5. In its counter, the Respondent corporation while refuting the claim of the Petitioner that it had fulfilled the pre-qualifying condition of past experience, has pleaded that the Petitioner had failed to furnish any document in support thereof. Referring to the certificate, issued by the Bank to the said effect, it has been contended that such certificate could not be treated as an experience certificate as it was mere a financial credential certificate and further the Bank was neither competent nor had any authority to issue the same. According to the Corporation, the relevant pre-qualifying condition was mandatory in nature and the Petitioner having failed to submit any document in connection therewith, its Techno Commercial bid could not be accepted. It maintained that in the list of documents, filed by the Petitioner along with its tender, no certificate of past experience was mentioned. It further pleaded that the Petitioner did not possess the Sales Tax registration certificate and Central Sales Tax clearance certificate at the time of submission of bid, which was apparent from its tax clearance application form accompanying the Techno Commercial bid which, inter alia, mentioned that its business was established in 2004. Claiming that Clause 2 of the NIB under the guidelines for submission of bids was mandatory, the Corporation has taken a stand that in case the Petitioner had supplied coal as claimed by it, it could have produced necessary documents with regard to payment of royalty, which was a must. It maintained that though payment of Sales Tax was not necessary in export business, the dealer was required to be registered with the sales Tax Department for claiming the necessary eligibility certificate or the Sales Tax exemption. The fact that the Petitioner had applied for the Sales Tax registration certificate only on 31.1.2004, it belied its claim of past experience with regard to supply of coal. 6. In reply, the Petitioner while detailing the procedure for export of coal, has contended that the same is effected through letters of credit, issued by foreign bankers, which were equivalent to work orders. As in its case, keeping in view the volume of supply, relatable to the past experience as sought for, i.e. 6,000 MT, production of voluminous records would have been involved, it had produced the certificate of its banker as it was the best available agency for the purpose. As in its case, keeping in view the volume of supply, relatable to the past experience as sought for, i.e. 6,000 MT, production of voluminous records would have been involved, it had produced the certificate of its banker as it was the best available agency for the purpose. The Petitioner further pleaded that as it was not involved in inter State business in the country, there was no prior occasion for it to be registered as a dealer under the Sales Tax authority. Govt. of Megalaya or the Central Sales Tax authority, Govt. of India. As the contract in question pre-supposed inter state transactions, it had applied for such registration mentioning about the commencement of its business of inter state trade in 2004. It also refuted the contention with regard to non registration of the lease agreement stating that neither such registration was necessary in Meghalaya nor was it a requirement as per the bid conditions. 7. In the above background of pleadings, Mr. Dutta has argued that having regard to the nature of the business conducted by the Petitioner before the submission of its bid the certificate of its banker was the best possible evidence in support of its past experience and that the stand of the Corporation in refusing to accept its Techno Commercial bid on the purported ground that the Petitioner had not produced any document in support of its past experience, is on the face of record, arbitrary, unfair and whimsical According to the learned senior Counsel, the pre-qualifying condition dealing with the past experience did not require any certificate to be issued by a particular authority and, therefore, the banker's certificate ought to have been accepted to be a document in terms of the requirement of the NIB. Referring to Clause 2.3 of the NIB, prescribing the documents to be submitted with the Techno Commercial bid, Mr. Dutta contended that no requirement of furnishing the Sales Tax registration certificate could be read therein. The insistence on the part of the Corporation for such certificate was, therefore, wholly unintelligible and misleading. According to him, in terms of Clause 2.3.4 of the NIB, the Techno Commercial bid was to be submitted in the format under document 1.1.4, which required certificates or orders in the alternative in support of the claim of past experience. The insistence on the part of the Corporation for such certificate was, therefore, wholly unintelligible and misleading. According to him, in terms of Clause 2.3.4 of the NIB, the Techno Commercial bid was to be submitted in the format under document 1.1.4, which required certificates or orders in the alternative in support of the claim of past experience. The learned senior Counsel, therefore, contended that in terms of the said clause of the NIB, the bidders have been offered an option to furnish either order(s) or certificates for their past experience and it was thus not necessary for them to furnish the certificates as well as the orders. The plea of the Corporation that the Petitioner's Techno Commercial bid was rejected as it had failed to furnish orders for supplying coal, was, therefore, wholly untenable, he argued. He further dismissed the stand of the Respondent Corporation disbelieving its claim of past experience on the ground that its application for Sales Tax registration had disclosed establishment of its business in 2004 contending that such registration was not necessary as the Petitioner was not involved in any inter state trade earlier. Mr. Dutta argued that the Petitioner's Techno Commercial bid was thus rejected by departing from the norms set out in the NIB, which was not permissible in law. The purported grounds on which the Petitioner's Techno Commercial bid was not accepted being wholly extraneous and perverse, the impugned action is liable to be adjudged as illegal and unconstitutional, he argued. Mr. Dutta also referred to the records produced on behalf of the Corporation to contend that two bidders, namely, M/s. Sunshine Enterprise and M/s. S.R. Supplier though had not furnished their financial capability certificates as per the NIB, the Corporation laboured through its old records in order to accept their Techno Commercial bids. He also pointed out from the records that the pro forma of solvency certificate issued in favour of two other bidders, namely, M/s. F.W. Enterprise and M/s. Pasupati Enterprise were not complete, but their Techno Commercial bids had been accepted. Similarly, for M/S. S.R. Supplier, as above, neither the Income tax clearance certificate was furnished nor the PAN was mentioned in its Techno Commercial bid, which, however, stood accepted. From this, Mr. Similarly, for M/S. S.R. Supplier, as above, neither the Income tax clearance certificate was furnished nor the PAN was mentioned in its Techno Commercial bid, which, however, stood accepted. From this, Mr. Dutta contended that the Corporation had applied different yardsticks for different bidders and as lack of transparency in the decision making process is writ large on its face, the impugned action of the Corporation cannot be sustained in law and on facts. According to the learned senior Counsel, acceptance of the Techno Commercial bid of the Petitioner would have led to the acceptance of its price bid which was much lower than the lowest price bid offered by the other bidders which would have saved the Corporation an amount of Rs. 1.5 crores per annum. On a consideration of public policy as well, the impugned action is thus liable to be interfered with, he argued. Mr. Dutta placed reliance on the following two decisions: (i) (1992) 1 GLR 194 (Dr. (Mrs.) Ronica Nagpal Baruah v. State of Assam and ors); (ii) (1997) 1SCC 531997 : (2) GLT(SC) 1: (Dutta Associates Pvt. Ltd. v. Indo Merchantiles Pvt. Ltd. and Ors.). 8. Mr. Phukan, learned senior Counsel for the Corporation in reply, has contended that it is apparent from the bid papers, submitted by the Petitioner that no past experience certificate had been submitted and the certificate issued by the bank was dominantly one of financial soundness. The certificate was not acceptable to the Corporation as one for past experience as according to the Corporation, it was not with reference to supply of coal to any industrial unit as required under Clause 2 of the NIB and further the same was issued with a reservation being without any risk and responsibility of the bank. No supporting document of such supply having been filed with the bid, the view taken by the Corporation was a plausible one and is not liable to be faulted with by this Court in exercise of its power of judicial review more particularly in absence of any allegation of mala fide. As the bids were mandatorily required to be filed in compliance of the stipulations contained in the NIB, it was not permissible on the part of the Corporation to entertain the request made in the representation for leave to furnish additional documents or informations. As the bids were mandatorily required to be filed in compliance of the stipulations contained in the NIB, it was not permissible on the part of the Corporation to entertain the request made in the representation for leave to furnish additional documents or informations. Moreover, the explanations provided in the reply affidavit with regard to the procedure of international transactions being post bid developments are not relevant for judging the legality or otherwise of the impugned action taken by the Corporation at the stage of consideration of the Techno commercial bids. 9. Mr. Choudhury, learned senior Counsel for the other bidders endorsed the arguments advanced on behalf of the Corporation and argued that though the Corporation is an authority under Article 12 of the Constitution of India, its evaluation of the Techno Commercial bids in contracts of the present nature could not be wholly bereft of commercial consideration. As the bidders were required to submit their bids strictly in terms of the terms and condition in the NIB, price consideration would become relevant only when the bidders are at par on other aspects. Price not being the sole criteria for selecting a bidder, Mr. Choudhury argued that as the Petitioner has failed to comply with the mandatory requirement of Clause 2 of the NIB, rentable to past experience, the impugned action of the Corporation in rejecting its Techno Commercial bid is unassailable. Sales tax though not payable in the international transactions, the Petitioner still was to be registered as a dealer and further it could have produced documents evidencing payment of royalty to the Government and the concerned District Council in support of its business in coal. According to the learned senior Counsel, there being no allegation of mala fide, the Corporation having acted within the parameters of the NIB in bona fide exercise of power, the Petitioner has failed to make out a case warranting interference by this Court under Article 226 of the Constitution of India. Mr. Choudhury rested his submission on the following authorities: (i) (1999) 1 SCC 492 (Raunaq International Ltd. v. I.V.R. Construction Ltd. and Ors.) (ii) (2001) 2 SCC 451 (W.B. State Electricity Board v. Patel Engineering Co. Ltd. and Ors.). 10. Before adverting to the rival contentions of the parties, it would be apt to briefly survey the law laid down in the authorities cited at the Bar. 11. In Dr. Ltd. and Ors.). 10. Before adverting to the rival contentions of the parties, it would be apt to briefly survey the law laid down in the authorities cited at the Bar. 11. In Dr. (Mrs.) Ronica Nagpal Baruah (supra), this Court noticing the discrepancy between the rules and the recommendations for Post-Graduate Medical Eduction in Assam held that in case there was a doubt arising out of such discrepancy the same should resolved to the benefit of the students as the common object of the rules as well as the recommendations was to facilitate admission of students. 12. In Dutta Associates (supra), the Apex Court was of the firm view that the authority concerned must spell out the precise procedure which it contemplates to follow in awarding a public contract and that it was not permitted to act on any hidden criteria in assessing the suitability of the participants in the process. 13. In Raunaq International (supra), the Apex Court underlined that awarding of a contract whether it is by a private party or by a public body or the State is essentially a commercial transaction and in arriving at a decision, considerations, inter alia, of the ability of the tenderer to perform the work of the requisite tender and quality and his past experience are of paramount importance. It was highlighted that price may not be always the sole criteria for awarding a contract and at times, a higher price for a much better quality of work can be legitimately paid in order to secure proper performance of the contract and good quality of work which would be in public interest. 14. In W.B. State Electricity Board (supra), some mistakes in the bid of Respondent Nos. 1 to 4 had occurred. They sought to correct the same. In that context, the Apex Court held as follows: 24. The controversy in this case has arisen at the threshold. It cannot be disputed that this is an international competitive bidding which postulates keen competition and high efficiency. The bidders have or should have assistance of technical experts. The degree of care required in such a bidding is greater than in ordinary local bids for small works. It is essential to maintain the sanctity and integrity of process of tender/bid and also award of a contract. The bidders have or should have assistance of technical experts. The degree of care required in such a bidding is greater than in ordinary local bids for small works. It is essential to maintain the sanctity and integrity of process of tender/bid and also award of a contract. The Appellant, Respondents 1 to 4 and Respondents 10 and 11 are all bound by the ITB which should be complied with scrupulously. In a work of this nature and magnitude where bidders who fulfil pre-qualification alone are invited to bid, adherence to the instructions cannot be given a goby by branding it as a pedantic approach, otherwise it will encourage and provide scope for discrimination, arbitrariness and favoritism which are totally proposed to the rule of law and our constitutional values. The very purpose of issuing rules/instructions is to ensure their enforcement lest the rule of laws should be a casualty. Relaxation or waiver of a rule or condition, unless so provided under the ITB, by the State or its agencies (the Appellant) in favour of one bidder would create justifiable doubts in the minds of other bidders, would impair the rule of transparency and fairness and provide room for manipulation to suit the whims of the State agencies in picking and choosing a bidder for awarding contracts as in the case of distributing bounty or charity. In our view such approach should always be avoided. Where power to relax or waive a rule or a condition exists under the rules, it has to be done strictly in compliance with the rules. We have, therefore, no hesitation in concluding that adherence to the ITB or rules is the best principle to be followed, which is also in the best public interest. 31....Tenders are invited not the basis of competitive bidding for execution of the work of the Project as it serves dual purposes. On the one hand it offers a fair opportunity to all those who are interested in complicating for the contract relating to execution of the work and, on the other hand it affords the Appellant a choice to select the best of the competitors on a competitive price without prejudice to he quality of the work. Above all, it eliminates favoritism and discrimination in awarding public works to contractors. The contract is. therefore, awarded normally to the lowest tenderer which is in public interest. Above all, it eliminates favoritism and discrimination in awarding public works to contractors. The contract is. therefore, awarded normally to the lowest tenderer which is in public interest. The principle of awarding contract to the lowest tenderer applies when all things are equal. It is equally in public interest to adhere to the rules and conditions subject top which bids are invited. Merely because a bid is the lowest the requirements of compliance with the rules and conditions cannot be ignored. 15. The principle of law as can be culled out from the above decisions is that in the matter of settlement of public contract, price is not the sole criteria and that considerations of past experience of a tenderer and his ability to perform to the required standard is equally important. In case of competitive bidding, once a bid is submitted as required under the relevant NIB containing the instructions to the bidders, it is not permissible for the bidders to make alterations or modifications in its bid already submitted. The public authority at the same time, has to be clear and categorical about the procedure it contemplates to follow in processing the tenders received and finalizing the contract. It is not open for it to act on any criteria not disclosed to the tenderers. This is to ensure fairness and transparency in the procedure. The decision in Dr. (Mrs.) Ronica Nagpal Baruah (supra) has been sought to be pressed into service to emphasize that in case of any doubt arising from the reading of the tender papers, the same should be resolved in favour of the tenderer concerned. 16. To appreciate better the rival arguments, reference to the relevant clauses of the NIB would be apposite. The bids were invited under two part system, namely (i) Techno-Commercial Bid and (ii) Price Bid. The bids were supposed to be submitted in two separate sealed covers and then put in a single sealed cover prescribing bid number, opening date and item name. An earnest money deposit of Rs. 5,00,000/- was to accompany the Techno Commercial bid. The Price Bids of those bidders whose Techno Commercial bids were found meeting the pre-qualifying conditions were only to be opened. An earnest money deposit of Rs. 5,00,000/- was to accompany the Techno Commercial bid. The Price Bids of those bidders whose Techno Commercial bids were found meeting the pre-qualifying conditions were only to be opened. The pre-qualifying conditions as contained in Annexure-II to the NIB may be set out as hereunder: 1.0 Bidder must be a coal Mine Owner or Coal Mine Operator of Meghalaya or a Trade Licence Holder to deal in Meghalaya coal. Documentary evidence must be enclosed with the Techno-commercial bid in support of Coal Mine Ownership/Mine Operator-ship/Trade Licence Holding (For sale of Coal) by way of attested photocopies of certificates issued by the appropriate Government authorities. 2.0 Bidder must have past experience of having supplied at least 6,000 MT Meghalaya Coal to any Industrial Unit of repute during any one of the preceding 3 (three) calendar years in own name. Documentary evidence in support of the experience by way of attested photocopies of certificates, executed orders etc. must be enclosed with the techno-commercial bid. 3.0 Bidder should have sound financial capacity to execute purchase order for minimum value of Rs. 1 crore in a year. Bidder should enclose necessary documentary evidence in support of his/their financial status along with the techno-commercial bid. The documents to be submitted along with a Techno-Commercial bid were as follows: 2.3 Documents top be submitted with the techno-commercial Bid: 2.3.1. EMD of Rs. 5,00 Lakh (Rupees Five Lakh) by Demand Draft Drawn in favour of Hindustan paper Corporation Ltd. payable at State Bank of India, Sonakuchi Branch, Assam EMD drawn on other than above maintained Banks shall not be accepted. 2.3.2. Income Tax Clearance Certificate/PAN No. and Sales Tax Registration No/Clearance Certificate (Emphasis supplied) 2.3.3. Documentary evidence fulfilling pre-qualifying criteria as listed at Annexure-II and all other terms and conditions of the bid. If extraneous details not called for, are entered in Part-r Bid, the same shall be treated as non-responsive and hence will be summarily rejected. 2.3.4. Techno-Commercial Bid (Part-I) should be submitted only in the format under Document No. 1.1.4. (Emphasis supplied) The format under document No. 1.1.4 referred to in clause 2.3.4 as above, so far as the requirement of past experience is concerned, reads as follows: 2. Record of Past Experience: Please refer Clause 2.0 at Annexure-II (Attested photocopies of order/certificates to be enclosed). (Emphasis supplied) 17. (Emphasis supplied) The format under document No. 1.1.4 referred to in clause 2.3.4 as above, so far as the requirement of past experience is concerned, reads as follows: 2. Record of Past Experience: Please refer Clause 2.0 at Annexure-II (Attested photocopies of order/certificates to be enclosed). (Emphasis supplied) 17. According to the NIB, purchase order was to be placed on L1 bidder(s) for minimum 50% to 75% of total quantity to be procured or the capacity of the L1 bidder(s) to supply; whichever was lower and the balance quantity was to be ordered at L1 priced on L2, L3 and L4 etc. bidders allocating equitably and fairly depending upon their price ranking and capacity to supply. Under Clause 5.2 of the NIB, suitability of bidders was to be judged on the basis of the above documents or a comparison of documents and assessment by the company as regards the bidders' suitability to execute the order, was final and binding. 18. The center of controversy in the instant case is the certificate, issued by the Petitioner's banker certifying about its financial soundness and past experience, appended as Annexure-I to the writ petition. Objection, however, as noticed above, had also been taken by the Corporation with regard to the Sales Tax registration of the Petitioner. 19. On a reading of the pre-qualifying conditions and the documents to be submitted with a techno-commercial bid, it appears that a bidder amongst others, was required to produce documentary evidence with regards to its past experience of having supplied 6000 MT of Meghalaya coal to any industrial unit of repute during one of the preceding three calendar years. Though the related clause required that such evidence was to be by way of attested photocopies of certificates, executed orders etc. the format for submission of the techno-commercial bid required that attested photocopies of orders/certificates were to be enclosed. In other words, file format indicated that the certificates and the executed orders could be furnished in the alternative. 20. Clause 2.3, which specified the documents to be submitted with a techno-commercial bid, inter alia, required furnishing of income tax clearance certificate/PAN number and Sales Tax registration number/clearance certificate. A bare reading of the said requirement would suggest that filing of Sales Tax registration certificate was not essential. It is noticeable that Clause 2.3.4. 20. Clause 2.3, which specified the documents to be submitted with a techno-commercial bid, inter alia, required furnishing of income tax clearance certificate/PAN number and Sales Tax registration number/clearance certificate. A bare reading of the said requirement would suggest that filing of Sales Tax registration certificate was not essential. It is noticeable that Clause 2.3.4. required that the techno commercial bid should be submitted only in the format referred to above. 21. On a scrutiny of the bid documents submitted by the Petitioner, it transpires that it had submitted a banker's certificate of financial soundness and past experience of exporting coal to Bangladesh of more than 6,000 MT during the last financial year as well as the Sales tax clearance certificate from the concerned authority of the State of Meghalaya. Documents such as lease agreement pertaining to coal mine, Certificate of importer-exporter code, PAN card etc. were also furnished. It would be discreet to notice the reasons for rejection of the techno-commercial bid of the Petitioner as can be ascertained from the records of the corporation. The relevant except from the minutes pertaining to Pre-qualification Bid Evaluation is extracted therein below: 2.1 M/s. North Eastern Trade International: a. The above vendor has submitted a copy of unregistered Lease Agreement valid w.e.f. 30.1.2003 of coal mine quarry in stamp paper of Rs. 10/- b. The vendor could not furnish Sales Tax Registration certificate. As per form of Certificate of Sales Tax assessment, they have applied for Sales Tax Registration Certificate on 31.1.2004 and the year of business established in the year 2004. In this context it may be stated that their documents submitted appears to be contradictory as in the ST Registration they had stated commencement of business date is in the year 2004, how can they make a lease agreement during the year 2003. c. The vendor could not provide any documentary evidence in support of past experience. However, financial soundness certificate obtained from Syndicate Bank, Shillong states that they have executed export order of 6000 MT coal to Bagladesh from their own quarry during last financial year. But no order copy has been furnished in support of it. 2.2 .... 2.3 Further though M/s. Sunshine Suppliers and M/s. S.R. Suppliers have not furnished Financial Capability Certificate as per NIB. But no order copy has been furnished in support of it. 2.2 .... 2.3 Further though M/s. Sunshine Suppliers and M/s. S.R. Suppliers have not furnished Financial Capability Certificate as per NIB. But it may be revealed from our record that during 2002-03, M/s. Sunshine Suppliers had executed supply of coal to the tune of Rs. 4 crore and M/s. S.R. Supplier, one of our existing coal supplier, has also supplied coal to the tune of Rs. 4.7 crore during 2003-04. 3.0 Based on the fact stated above it may thus be concluded that excepting M/s. North Eastern Trade International all the bidders have fulfilled our NIB terms. Thus it is proposed that the price bid of techno-commercially successful bidders may be opened after obtaining endorsements/comments of Utility and Finance Division. It is also suggested that before price bid opening, a committee comprising representative from Utility, Finance and Commercial may be deputed to Meghalaya coal belt area i.e. Bapung, Khelrihat to ascertain the prevailing price at source. 22. It would thus appear the techno-commercial bid of the Petitioner did not meet the approval of the Corporation on the ground that it had submitted an unregistered lease agreement and had failed to furnish Sales Tax registration certificate as well as orders of supply of coal in support of the certificate of the banker. The grounds of rejection having been recorded as above, no argument of improvement on those can thus be entertained and the impugned action of the Corporation has to be tested on the touchstone one of these grounds. 23. To start with, under the relevant clauses of the NIB, set out herein above, registered lease agreement or the sales tax registration certificate were not specified documents to be mandatorily furnished along with the techno-commercial bid. Admittedly, the Petitioner had not submitted the sales tax registration certificate. An explanation had been provided by it that as it was hitherto engaged in international transactions, payment of sales tax necessary for inter State trade was not called for and that as it had decided to participate in the present process, involving inter State trade, it had mentioned in the relevant form about the commencement of its business in inter State trade in 2004. It has not been disputed by the Respondents that for international transactions, payment of sales tax is not necessary. It has not been disputed by the Respondents that for international transactions, payment of sales tax is not necessary. As furnishing of Sales Tax registration certificate was not an essential condition in the NIB, the exception taken on that ground cannot be sustained. Equally, the consideration on account of submission of unregistered lease agreement, does not appear to be relevant. 24. As noticed herein above, the prescribed format for submission of techno commercial bid indicates that a bidder could submit the certificate(s) of past experience or the executed orders of supply in support thereof in the alternative. It is not unlikely that the Petitioner being led by the requirement of the format had submitted only the certificate of its banker regarding its past experience. The Petitioner has in its pleading set out in details the manner in which export of coal is conducted. It appears therefrom that it is effected through letters of credit, issued by the concerned banker of the importer and the transactions are completed with the involvement of the banker of the exporter. This had not been denied by the Respondents. Further that the syndicate Bank, Shillong is the banker of the Petitioner, is also not questioned by the Respondents. The bank has issued the certificate with regard to financial Soundness of the Petitioner as well as its past experience. The minutes recorded herein above, do not evince that the certificate was rejected by the corporation. The rejection of the techno-commercial bid of the Petitioner on that ground that the same was not supported by any copy of the executed orders, therefore, does not appeal to this Court inasmuch as going by the format in which the bid had to be submitted, no such requirement can be read into it. 25. At the stage of examining the techno-commercial bids, the Corporation was to ascertain whether the same was in compliance of the requirements of the NIB. The price bids of the bidders whose techno commercial bids met such requirements were to be opened and their suitability was to be judged finally on an over all consideration of the documents and the materials furnished by them for selecting the successful bidder. The considerations on which the techno-commercial bid of the Petitioner had been cast aside, therefore, do not appear to be in tune with the requirements of the NIB. The considerations on which the techno-commercial bid of the Petitioner had been cast aside, therefore, do not appear to be in tune with the requirements of the NIB. It may be true that the Petitioner could have furnished other documents as well to back up its bid, but to reject its techno-commercial bid on the ground that the documents furnished by it were not in compliance with the requirements of the NIB cannot in the facts and circumstances of the case by sustained. The Corporation has conspicuously departed from its professed norms, i.e. the stipulations in the NIB in discarding the techno-commercial bid of the Petitioner. 26. A scrutiny of the record further reveals that the solvency certificate of M/s. F.W. Enterprise and M/s. Pasupati Enterprise, two other bidders, were incomplete and the techno-commercial bid of M/s. S.R. Supplier did not set out the PAN and was not accompanied by the income tax clearance certificate as well. The minutes dated 9.2.2004, relating to the evaluation of the techno-commercial bids further revealed that two bidders, namely M/s. Sunshine Enterprise and M/s. S.R. Supplier had not furnished the financial capability certificates as per the NIB, but those were not rejected and the Corporation referred to its past records in support of their claim of financial capability. 27. The records of the Corporation, therefore, reveal that it had not maintained a uniform approach in respect of the bidders in processing their techno-commercial bids. While the Corporation adopted the yardstick of over strict adherence to the NIB requirements of far as the Petitioner is concerned, it displayed a relaxed and flexible attitude in respect of few other bidders. 28. This, in my view, is destructive of the fundamental principle of fairness and non-arbitrariness in matters relating to distribution of State largess by a public authority. A public process must be informed with fair play and reasons to engender a feeling of confidence lest it is a suspect. Every action of a public authority is structured within a system of control and the requirement to act fairly is implicit in the nature of the function intended to be performed; it need not be shown and superadded. A public process must be informed with fair play and reasons to engender a feeling of confidence lest it is a suspect. Every action of a public authority is structured within a system of control and the requirement to act fairly is implicit in the nature of the function intended to be performed; it need not be shown and superadded. True it is that the authority concerned has to be conceded same play in the joints and this Court in the exercise of its power of judicial review is not supposed to substitute its views for those held by it. Certain amount of discretion within the permissible limits has to be acknowledged, but the same cannot be unfettered or unlimited. The discretion has to be exercised with fairness and rationality and not capriciously. Bereft of rationality and fairness, discretion would degenerate into arbitrariness, which is antithetic to the rule of law. A decision of a public authority to be constitutionally valid, has to accord with the peremptory requirement of non-arbitrariness. Judicial review is of the decision making process and not the ultimate decision. The manner of arriving at the decision is, therefore, under judicial scrutiny. The process to withstand such scrutiny has to comply with the fundamental rule of fairness, reasonableness and transparency in action. Insistence to hold the public authority to the declared norms is to achieve this object. 29. The Corporation having set out the terms and conditions in the NIB, it has to be inflexibly held thereto and its actions have to be judged on the basis thereof. If the conditions stipulated in the NIB are conflicting or inconsistent in some aspect and a bidder being guided by the resulting obscurity, submits his bid understanding the same in a particular way it would be wholly unfair to reject the bid on the purported ground that he had failed to meet the requirement of some other conditions which on a reading of the NIB, as a whole, may appear to be nonexistent or irreconcilable with the conditions found to be complied by the bidder. The purpose of inviting bids to settle a public contract is to secure increased participation through competitive offers in the interest of quality of performance. The approach in scrutinizing and evaluating the offers has to be with an object of achieving such purpose. The purpose of inviting bids to settle a public contract is to secure increased participation through competitive offers in the interest of quality of performance. The approach in scrutinizing and evaluating the offers has to be with an object of achieving such purpose. The authority concerned is required to adopt a reasonable, rational and realistic attitude. The treatment to be meted out to the bidders has to be consistent and uniform. The facts of the present case disclose that the impugned decision of the Corporation falls short of the above standards. Having regard to the amenability displayed by the Corporation, in respect of few other bidders, while dealing with their techno-commercial bids, in my view, the Corporation ought to have offered an opportunity to the Petitioner before rejecting its techno-commercial bid on the above considerations. 30. The upshot of the above discussion is that the Corporation in rejecting the techno commercial bid of the Petitioner, is found to have departed from the NIB conditions. The impugned action, therefore, cannot be sustained. The techno-commercial bid of the Petitioner has to be thus held to have been wrongly rejected by the Corporation. 31. In the above premises, the petition is allowed. The Corporation would now consider the techno-commercial bid of the Petitioner afresh in view of the conclusions recorded herein above and would thereafter take a final decision in the matter as per the scheme of the NIB. No costs. Petition allowed