A. K. Transport v. Tenughat Vidyut Nigam Ltd. [Alongwith Wpc No. 2935/2004]
2004-07-22
M.Y.EQBAL
body2004
DigiLaw.ai
ORDER M.Y. Eqbal, J. 1. Heard Mr. Biren Poddar, learned Senior Counsel for the petitioners, Mr. Delip Jerath, learned counsel for the respondent Tenughat Vidyut Nigam Ltd and the learned counsel appearing for the intervener. 2. In these two writ petitions the petitioners have prayed for quashing Clause (2) of the tender notice bearing No. 7/Coal Trans. TVNL/RAN/04 dated 27.5.2004 issued by respondent No. 1 Tenughat Vidyut Nigam Ltd (in short TVNL) for transportation of coal of on road from the collieries of West Bokaro of Central Coalfiled Ltd. to Tenughat Thermal Power Station, Lalpania and further for a direction to the respondents to issue tender papers to the petitioners as they fulfill all the eligible criteria laid down in the tender notice except the conditions contained in the aforesaid clause. 3. Mr. Biren Poddar, learned Senior Counsel assailed the impugned tender notice particularly Clause (2) as being illegal, arbitrary, discriminatory and malafide and amounts to depriving many of the eligible bidder from participating in tender process with sole object to accommodate the persons of their choice. Learned counsel submitted that the terms and conditions provided in the tender notice should have reasonable nexus with the objection sought to be achieved. According to learned counsel the condition put in the tender notice that the bidders should have experience of transportation by road in the power house located in the State of Jharkhand have no reasonable nexus with the work to be completed. Learned counsel submitted that the action of the respondents/Tenughat Vidyut Nigam Ltd in putting such conditions and thereby not allowing large number of participants in the aforesaid tender notice amounts to an arbitrary and illegal act which is also detrimental to the interest of the respondents. Learned counsel drawn my attention to the decision of the Supreme Court in the case of "Sterling Computers Ltd. v. M & N Publications Limited and Ors." (1993) 1 SCC 445 , and in the case of "Tata Cellular v. Union of India, (1994) 6 SCC 651 , and submitted that if the process of selection is malafide inasmuch as the notice inviting tender excludes all the contractors then this Court can issue appropriate direction for the rectification of the tender notice. 4. Mr.
4. Mr. P.K. Prasad, learned counsel for the Tenughat Vidyut Nigam Ltd. on the other hand firstly contended that the conditions contained in the notice inviting tender cannot be a subject matter of judicial review. According to the learned counsel only decision making process and not the merit of the decision can be the subject matter of judicial review. Learned counsel then drawn my attention to the counter affidavit filed by the Tenughat Vidyut Nigam Ltd. and submitted that relief sought for by the petitioner is not tenable since the petitioner on earlier occasion while undertaking contract work of the respondents failed to lift the coal and transport it to Tenughat Thermal Power Station being work order No. 14, dated 23.11.2000. Even petitioner did not fulfill his contract so far CCL is concerned on their Rajrappa Project. It is contended that as per Clause (2) of the tender notice the contractor should have experience of transportation of coal to power house because it is a specialised work and the transportation has also to identify and lift the appropriate quantity of the coal. 5. Mr. Pandey Neeraj Rai, learned counsel appearing on behalf of the interveners drawn my attention to intervention petition and submitted that this Court cannot substitute the terms and conditions contained in the tender notice in exercise of power of Judicial review under Article 226 of the Constitution of India. 6. A copy of the tender notice has been annexed as Annexure-1 to the writ application. Clause (2) of the tender notice put a condition that the transporters should be financially sound having executed similar types of work i.e. transportation by road in power house located in the State of Jharkhand worth more than Rs. 3 crore in any consecutive 12 (twelve) months during the last five years. 7. The principle of Judicial Review in contractual matter has been set at rest by catena of decisions of the Supreme Court. There is no need to refer all those decisions. Suffice it to refer the recent decision of the Supreme Court on the same point in the case of "Directorate of Education and Ors. v. Educomp Datamatics Ltd. and Ors.", (2004) 4 SCC 19 . The facts of the case was that the, "Directorate of the Education, Govt.
There is no need to refer all those decisions. Suffice it to refer the recent decision of the Supreme Court on the same point in the case of "Directorate of Education and Ors. v. Educomp Datamatics Ltd. and Ors.", (2004) 4 SCC 19 . The facts of the case was that the, "Directorate of the Education, Govt. of NCT of Delhi had invited open tender with prescribed eligibility criteria in general terms and condition under tender document for leasing of supply, installation and commissioning of the computer systems, peripherals and provision of computer education services in various Government/Government added Senior Secondary, Secondary and Middle Schools under the Directorate of Education, Delhi. In the year 2002-03, 748 schools were to be covered. Since the expenditure involved per annum was to the tune of Rs. 100 crores, the competent authority took a decision after consulting the Technical Advisory Committee for finalization of the terms and conditions of the tender document providing therein that tenders be invited from firms having a turn over of more than Rs. 20 crores over the last 3 years. The hardware cost itself was to be Rs. 40-45 crores. The Government introduced the criterion of turn over of Rs. 20 crores to enable the companies with real competence having financial stability and capacity to participate in the tender, particularly in view of the past experience." The said condition was challenged before the Delhi High Court. A Bench of the Delhi High Court held that term providing turn over at Rs. 20 crores did not have nexus with either increase in the number of schools or quality of education to be provided and interfered with the terms of tender notice. The matter reached up to the Supreme Court. Their lordship allowed the appeal and observed as under :-- "It has clearly been held in these decisions that the terms of the invitation to tender are not open to judicial scrutiny, the same being in the realm of contract. That the Government must have a free hand in setting the terms of the tender. It must have reasonable play in its joints as a necessary concomitant for an administrative body in an administrative sphere. The Courts would interfere with the administrative policy decision only if it is arbitrary, discriminatory, malafide or actuated by bias. It is entitled to pragmatic adjustments which may be called for by the particular circumstances.
It must have reasonable play in its joints as a necessary concomitant for an administrative body in an administrative sphere. The Courts would interfere with the administrative policy decision only if it is arbitrary, discriminatory, malafide or actuated by bias. It is entitled to pragmatic adjustments which may be called for by the particular circumstances. The Courts cannot strike down the terms of the tender prescribed by the Government because it feels that some other terms in the tender would have been fair, wiser or logical. The Courts can interfere only if the policy decision is arbitrary, discriminatory or malafide. 8. In the instant case, as noticed above, tender notice is in respect of the transportation of coal from the collieries to the Tenughat Thermal Power Station and considering the specialized nature of job and also to ensure that there is no failure in execution of work since the Thermal Power Station is a public utility service and failure on the part of transporters would result in shutting down the power station, the terms and conditions put in Clause (2) of the tender notice cannot be held to be illegal, arbitrary and malafide. 9. In the light of the aforesaid decisions and also having regard to the facts and circumstances of the case, I do not find any strong reason to exercise power of judicial review in respect of the terms of the tender notice. 10. For the aforesaid reasons, no relief can be granted to the petitioners. These two writ petitions are dismissed.