Shimnit Utshe India v. West Bengal Transport Infrastructure Development Corporation Ltd.
2006-06-27
SOUMITRA SEN, V.S.SIRPURKAR
body2006
DigiLaw.ai
Judgment :- V.S. SIRPURKAR, C. J. (1) THIS appeal is directed against the judgment by the learned Single Judge of the Court dismissing the writ petition filed by the present appellant. In the said writ petition, the original writ petitioner appellant herein had sought for the writ of mandamus directing to withdraw cancel and/or rescind the notice inviting tender dated 4. 10. 2005 issued for the purpose of bidding for the manufacture of high security registration plates for motor vehicles. The original writ petitioner/appellant herein had further prayed for rescinding the order dated 27. 4. 2005 cancelling the notice inviting tender dated 14. 7. 2003 issued for the same purpose. Thirdly a consequential prayer was made of revalidating the last date for submission of tenders in terms of the notice inviting tender dated 14. 7. 2003. Amongst other prayers, a declaration was sought in respect of Clauses 1. 5. 2 to 1. 5. 6, 2. 3. 2, 4. 14, 2. 13. 4, 2. 30. 4. 1 and 4. 1. 2 of the NIT dated 4. 10. 2005 declaring them as illegal and ultra vires the Central Motor Vehicles (New High security Registration Plates) Order, 2001 and also further declaring them contradictory to the order passed by the Honourable Supreme Court in a case reported in 2005 (1) Supreme Court Cases 679, Association of Registration plates vs. Union of India and Ors. and also further declaring them as malicious, mala fide and bias so also the prayers for interim reliefs were claimed restraining the authorities from proceeding with the NIT dated 4. 10. 2005. (2) THE learned Single Judge after hearing both the parties dismissed the said writ petition. During the pendency of the appeal, it was found that there were number of other parties who had besides the original writ petitioner offered their bids. As such the said parties would have been affected because of the prayer made in the writ petition of cancelling the second NIT dated 4. 10. 2005 and restoring the tender in pursuance of the first NIT dated 14. 7. 2003 in which they had not offered the bids. Therefore, all these parties were directed to be joined as the parties to this appeal and were heard.
10. 2005 and restoring the tender in pursuance of the first NIT dated 14. 7. 2003 in which they had not offered the bids. Therefore, all these parties were directed to be joined as the parties to this appeal and were heard. (3) BEFORE we take up the appeal for consideration, it would be better to see the factual matrix: FACTUAL MATRIX rule 50 of the Motor Vehicles Rules was amended firstly on 28.3.2001, 24.9.2001 and on 21. 1. 2003 with effect from 1. 1. 2004. The basic object behind these amendments was to curb the vehicle thefts which invariably they were used in various types of crimes like murder, dacoity, kidnapping etc. apart from the terrorist activities. The Central Government on the recommendation of Technical Committee had formulated a system of high security registration plates (HSRP for short). (4) THESE amendments to Rule 50 specifically provided for the HSRP having the following features :(i) a hot aluminium plate ; (ii) The plate to be suitable for hot stamping and would be a reflective sheet; (iii) letters IND in blue colour on the plate; (iv) Every plate to have hot stamped chromium based hologram; (v) plate on the rear to be fastened with non-removable/non-reusable snap-lock fitting system; and (vi) There would be a third registration mark. Such registration mark would be a self-reflective chromium-based hologram sticker to be affixed on the windshield of the vehicle. (5) THESE features were provided mainly to prevent counterfeiting, to identify the nationality of the vehicle, further to provide a full-proof plate having a water mark nonerasable by any mechanical or technical process and to provide a tamper-proof system for fixing the plate to the body of the vehicle at the back etc. so that the plate could not be changed. It also provided the visibility and identification of the plate from a distance of minimum 200 meters. The sticker affixed to the windshield would instantaneously give away the seven-digit laser code containing the engine number and the chasis number. (6) AFTER the amendments to Rule 50 and the advent to the New High security Registration Plates (Amendment) Order, 2001, the Ministry of Road transport and Highways held a meeting dated 4. 3. 2001 between the representatives of all States and Union Territories for introduction of the new system of registration plates. The minutes of this meeting were circulated by communication dated 6. 3.
3. 2001 between the representatives of all States and Union Territories for introduction of the new system of registration plates. The minutes of this meeting were circulated by communication dated 6. 3. 2002 and they contained the guidelines for incorporating necessary conditions in the notice inviting tenders which were to be issued by the various States for the purpose of manufacturing such high security registration plates. Initially the guidelines suggested: (i) the tender document should specify whether the appointment of the manufacturer/vendor was to be for the whole State or certain part of the states; (ii) the tender document should include the clear terms regarding the bank guarantee; (iii) the tender document would provide a clause regarding a report-back on certain aspects on a periodic and regular basis; and (iv) the bidder must famish the proof of past experience/expertise in this area or proof of the same with a collaborator. (7) IN respect of these guidelines, a further communication was made by the Ministry dated 14. 6. 2002 where under it was informed that the guidelines which were sent along with the letter dated 6. 3. 2002 were reviewed and in place of existing para 10, a new para should be read as substituted. Old para was to the effect that the bidder must furnish proof of the past experience/ expertise in this area or proof of the same in respect of the collaborator. The new para now substituted was to the effect that the bidder may be asked to provide details about the experience/capability of his collaborator to the satisfaction of the State authorities. In para 2 of this communication, it was specifically informed that the details in old as well as the substituted para 10 were suggestive in nature. (8) A further clarification was thereafter issued vide a communication no. RT-11028/4/2002-MVL dated 13th November, 2002. In second para of this communication a reference was made to the earlier guidelines dated 6.3.2002 as also the subsequent amendment thereto vide communication dated 14.6.2002. The following two paras are extremely important. They are quoted as under: "3. As per information made available by the testing agencies, so far five number of vendors, namely, M/s. Shimnit Utsch, M/s. Real Industries, m/s. Eastern Saw and Steels and M/s. Promuk Hofftnan have got the certification from CRRI, New Delhi and M/s. Utsav from ARAI Pune.
The following two paras are extremely important. They are quoted as under: "3. As per information made available by the testing agencies, so far five number of vendors, namely, M/s. Shimnit Utsch, M/s. Real Industries, m/s. Eastern Saw and Steels and M/s. Promuk Hofftnan have got the certification from CRRI, New Delhi and M/s. Utsav from ARAI Pune. Product of some more vendors are at different stages of testing in the said two testing agencies. 4. It is further clarified that suggestive guidelines do not stipulate anywhere that the details about experience/capability of bidder/ collaborator as contained vide para 10 thereof imply a mandatory requirement of either experience in 5 number of countries or that the tender is required to be valid for a period of 15 years. On the contrary in the course of the review meeting held on 16. 9. 2002 by Secretary (RTandh)with all the States/ UTs, it was felt that in case the bids were being initiated for a long period, the question of escalation in prices would arise and in case the contract was for a relatively short period of say three to five years, such demand for escalation clause in the prices would not logically arise. " (9) THIS communication was in pursuance of a meeting dated 16. 9. 2002 held between the officials of the Ministry, representatives of States/union territories and the manufacturers. On this backdrop, the first NIT came to be issued. Like the concerned NIT , number of other NITs were issued in various States which came to be challenged in various High Courts and, therefore, the Supreme Court withdrew all the cases to itself and disposed of all the cases vide a judgment reported in 2005 (1) Supreme Court Cases 679, Association of Registration Plates vs. Union of India and Ors. The main reasons why the first NIT was challenged were the three conditions in that nit which pertained to the requirement of the tenderer or the bidder having sufficient experience in the field of registration plates and the further requirement of its working at least in five countries for licence plates and in minimum three countries with licence plates having security features worldwide. The bidder shall also require to attach along with the proforma necessary credentials from the Government of such countries. This was apart from the further requirement of a bidder furnishing typed approved certificate (TAC for short).
The bidder shall also require to attach along with the proforma necessary credentials from the Government of such countries. This was apart from the further requirement of a bidder furnishing typed approved certificate (TAC for short). The second reason for the challenge was the requirement of the tenderer or bidder having a minimum annual turnover equivalent to INR 30 crores in the immediately preceding the last year and further 25% of the turnover being from the licence plates business. A certificate duly attested by the Chartered Accountant/bank was a must to be filed along with the tender. The last reason for the challenge was that the contract was to be for a period of 15 years and the Government was to ensure that no second bidder would be approved during the currency of the contract in the State except in case of the termination of the contract. The challenge of the Association was that the three conditions concerning experience and extent of the business contained in the notices inviting tenders were discriminatory and unreasonable. They were tailor-made to sub serve the business and interest of a class of a manufacturer having foreign collaboration and not others. It was suggested that the said conditions made it mandatory for the bidders to entertain a collaboration with the foreign collaborators and it became a precondition to participate in the bidding process. In short, the conditions were so stringent that they were tailor-made for a very few known companies. The. further challenge was on the basis of amended Rule 50. It was suggested that it had an inbuilt safeguard to ensure the technical competence of the prospective manufacturer and have controlled issuance of registration plates. It was contended that the manufacturer could manufacture the said plates only if the said manufacturer had the TAC from one of the autonomous agencies for which the strict compliance with the conditions therefore was required and as such the State government could not have declared any of the manufacturers as competent or incompetent with respect to their technical competence. (10) IT was pointed out that such high security registration plates were in prevalence only in few countries which were much smaller than India, having lesser number of automobiles.
(10) IT was pointed out that such high security registration plates were in prevalence only in few countries which were much smaller than India, having lesser number of automobiles. The experience regarding such countries could not be relevant consideration particularly when the indigenous manufacturers had the technical capacity to manufacture registration plates on their own by complying with all the standards and norms laid down in Rule 50 without entering into the collaboration with any foreign partner. (11) THE further challenge before the Supreme Court was on the basis of article 19 (1) (g) since the indigenous manufacturers were in reality prohibited to do the business of manufacturing and supplying the high security plates. Still further challenge was that the condition regarding the minimum turnover of the business was only for the purpose of advancing the business interest of the group of companies having foreign links and support. Lastly the challenge was that the condition of period of 15 years was an attempt to create monopoly in favour of one of the private companies and this was against the public interest as it would leave the consumer/vehicle owner to the mercy of a said successful bidder. Such a contract for a long term of 15 years would eliminate the benefit of a competitive market and this would entail hike in the prices of the two plates required to be purchased by the vehicle Owners. (12) SINCE there was a difference of opinion between the two learned judges of the Supreme Court, the matter was referred to a larger Bench and was disposed of. The Supreme Court dismissed all these writ petitions and maintained the first NIT dated 14. 7. 2003 which also had the conditions like the one which we have quoted above. The conditions were held to be justified conditions. (13) THE Supreme Court held in para 35 of the judgment that considering the effective implementation of the scheme and further considering the enormous work involved in switching over to new plates within two years for the existing vehicles a resort to trial and error method by the State would prove hazardous. It was further held in same paragraph that the impugned clauses stipulating that the tenderers must have an experience in the field of registration plates in at least three countries and must have a specific financial capacity of Rs.
It was further held in same paragraph that the impugned clauses stipulating that the tenderers must have an experience in the field of registration plates in at least three countries and must have a specific financial capacity of Rs. 40 crores with an annual turnover of at least Rs. 50 crores and a minimum of 15 % of turnover of registration plates business, were incorporated to ensure that the selected manufacturer should be technically and financially competent to fulfil the contractual obligations, which had the big magnitude and which required huge investment qualitatively and quantitatively. (14) IN paragraph 36 the Supreme Court observed: "it is true that many indigenous manufacturers are in a position to supply the plates on the basis of technical assistance available in and outside the country. There are many tenderers who possess type approval certificates (TACs) but to ensure major quantity of the supply in the initial two years and a periodical supply for new vehicles for a long period, only a manufacturer who is sound both technically and financially, is required. " (15) IN paragraph 37, the Supreme Court commented that the technical know-how for the manufacture of HSRP was available outside India and therefore, particularly in view of the scheme contemplated in Rule 50 for registration plates is a new experiment for India. The tender conditions encouraging such manufacturers with foreign collaborations cannot be held to be discriminatory to indigenous manufacturers nor could this be held to be a deliberate attempt on the part of State authorities to eliminate indigenous manufacturers. (16) IN paragraph 38 the Supreme Court further held as under: "in the matter of formulating conditions of a tender document and awarding a contract of the nature of ensuring supply of high security registration plates, greater latitude is required to be conceded to the state authorities. Unless the action of tendering authority is found to be malicious and a misuse of its statutory powers, tender conditions are unassailable. " (17) THE Supreme Court ultimately found that the tender conditions did not violate the equality clause under Article 14 nor did it encroach on the fundamental rights of the class of intending tenderers under Article 19 of the Constitution.
" (17) THE Supreme Court ultimately found that the tender conditions did not violate the equality clause under Article 14 nor did it encroach on the fundamental rights of the class of intending tenderers under Article 19 of the Constitution. The Supreme Court further observed: "we do not find that the clauses requiring experience in the field of supplying registration plates in foreign countries and the quantum of business turnover are intended only to keep indigenous manufacturers out of the field. It is explained that on the date of formulation of scheme in Rule 50 and issuance of guidelines there under by the Central government, there were not many indigenous manufacturers in India with technical and financial capability to undertake the job of supply of such high dimension, on a long-term basis and in a manner to ensure safety and security which is the prime object to be achieved by the introduction of new sophisticated registration plates. " (18) THE Supreme Court further held that the NIT was open to response by all and did not create a monopoly in favour of any private party. (19) IN paragraph 40, the Supreme Court farther stressed upon the high security concept and observed that if there was a single manufacturer, he could be forced to go and serve rural areas with thin vehicular population. (20) IN paragraph 41, the Supreme Court did not find fault with the long period of contract of 15 years considering the huge investment required towards the infrastructure by the selected manufacturer. (21) THE Supreme Court then observed that there was no material on record to infer any mala fide design on the part of the. tendering authority and also observed that there were only a few concerns in India having collaboration with foreign parties possessing the expertise. It then held that since the terms of NIT were fixed, after joint deliberations between State authorities and intending tenderers, they could not be said to be tailored so as to benefit only a certain identified manufacturers having foreign, collaboration and merely because a few manufacturers like the petitioners did not qualify to submit the tender, the tender conditions could not be held to be discriminatory. (22) IN para 43 the Supreme Court observed: "article 14 of the Constitution prohibits the Government from arbitrarily choosing a contractor at its will and pleasure.
(22) IN para 43 the Supreme Court observed: "article 14 of the Constitution prohibits the Government from arbitrarily choosing a contractor at its will and pleasure. It has to act reasonably, fairly and in public interest in awarding contract. At the same time, no person can claim a fundamental right to carry on business with the government. All that he can claim is that in competing for the contract, he should not be unfairly treated and discriminated, to the detriment of public interest. " (23) IN the subsequent paragraphs, the Supreme Court did not accept the challenge to the tender conditions on the basis of paragraph 2 of Rule 50 (1) (v). It also did not accept the challenge to paragraph 4 (x) of the Motor Vehicles order, 2001. Ultimately the Supreme Court dismissed the writ petition. This judgment was passed on 30th November, 2004. We have deliberately dealt, in details, with the findings of Supreme Court since the main argument of the appellant is based on these findings. (24) ON the heels of the judgment, however, an order came to be passed by the State Government on 27. 4. 2005 whereby the NIT dated 14. 7. 2003 came to be cancelled. The tender process in pursuance of the earlier NIT had not progressed due to the pending litigation including the challenges raised at the instance of parties including the present writ petitioner. Various reasons were given for cancellation of the earlier NIT.
4. 2005 whereby the NIT dated 14. 7. 2003 came to be cancelled. The tender process in pursuance of the earlier NIT had not progressed due to the pending litigation including the challenges raised at the instance of parties including the present writ petitioner. Various reasons were given for cancellation of the earlier NIT. They were: i) that only four numbers of bidders were participated in the tender process; ii) that the Supreme Court had held that the concerned State Government are legally competent to determine the terms and conditions for the implementation of the scheme for high security registration plates for motor vehicles; iii) that the technical bids submitted by the bidders could not be processed evaluated and finalised upto the date of the order and even the financial bids could not be opened; iv) that it had come to, the notice of the State Government that subsequent to issue of the said NIT, a considerable number of manufacturers of such high security registration plates had obtained the requisite type approval certificates from the institution approved by the Central Government as per the provisions of the Motor Vehicles Act; v) that due to passage of time and change in the relevant field on account of coming up good number of duly approved manufacturers and in view of the observations made by the Supreme Court, it was in the greater public interest and also in the interest of the public safety and security that the terms and conditions of the said NIT should be reviewed and determined afresh. The last paragraph of this communication is worth noting. It is as under: "now, therefore, the Governor is pleased to direct that the entire tender process so far followed pursuant to the aforesaid Notice inviting Tenders ("nit) for supply and fitment of High Security Registration Plates for motor Vehicles as issued by the West Bengal Transport Infrastructure development Corporation Limited on behalf of the State Government be cancelled and fresh process for inviting such bids be commenced after due determination of the terms and conditions thereof in the light of what has been stated above.
The Governor is further pleased to direct that the Bidders (four numbers) who had participated in the previous tender process (as cancelled) be allowed to participate in the new tender process to be initiated hereafter, if they so desire and the Earnest Money deposit (EMD) made by them be returned forthwith. " (25) IT is not disputed that the petitioner then withdrew its earnest money deposit. (26) IT was only on 4. 10. 2005 that the fresh NIT was floated by the State of West Bengal. It is an admitted position that the petitioner in pursuance of this fresh NIT offered its bid by complying with all the formalities including the payment of earnest money deposit and offering the technical as well as the financial bids. However, on the same date, the petitioner filed the W. P. No. 2083/2005 challenging the Second NIT on various grounds. In the same petition, the petitioner also challenged the order of the State Government dated 27.4.2005 cancelling the earlier tender process initiated in pursuance of the first NIT. (27) EARLIER to this, the petitioner had moved the Court on 11. 3. 2005 questioning the right of one of the tenderers who participated in the process initiated by the first NIT. Thereafter one of the four tenderers, withdrew from the process. It was at this stage that the State Government cancelled that very tender process. Therefore, that writ petition was disposed of as infructuous on 4. 5. 2005. It was then that the petitioner had unconditionally taken the refund of the earnest money deposit in June, 2005. The second nit was notified in the month of September, 2005 where under the documents were to be purchased between 4. 10. 2005 and 20. 10. 2005 by making a nonrefundable costs of Rs. 50,000/- and the earnest money deposit was of Rs. 25,00,000/ -. The tender was to be submitted on 14. 10. 2005. It seems that the petitioner then went on to challenge the second NIT. (28) THE basic challenge in the present writ petition was as under: CHALLENGE BY THE PETITIONER AND THE STAND OF THE RESPONDENTS. The petitioner alleged that firstly the order dated 27. 4. 2005 was vitiated by legal malice and there was no valid reason to cancel the process.
(28) THE basic challenge in the present writ petition was as under: CHALLENGE BY THE PETITIONER AND THE STAND OF THE RESPONDENTS. The petitioner alleged that firstly the order dated 27. 4. 2005 was vitiated by legal malice and there was no valid reason to cancel the process. The grounds on which the second tender process was challenged were fictitious since there was no change in the conditions existing in 2003 due to the passage of time. It was further alleged that the decision to cancel was taken to favour someone already in the mind of the State Government. It was then suggested that the State Government itself had taken a stand in the earlier litigation which stand was supported by the petitioner and, therefore, the petitioner was entitled to legitimately expect that the petitioners offer in the first bid would be meaningfully considered. In cancelling the tender process, the State Government had defeated the legitimate expectations of the petitioner. (29) IT was suggested that some clauses in the first NIT viz. Clause Nos. 1. 5. 2, 1. 5. 5, 1. 5. 6 and 1. 5. 7 were specifically put in the first NIT to ensure selection of a proper manufacturer who was both technically qualified and financially sound. It was further pointed out that specifically every bidder had to have the experience in four countries either himself or the joint venture. It was then pointed out that respondent No. 1 in the earlier round of litigation had filed a counter-affidavit justifying these stringent clauses before the Supreme Court and thus the State Government had also accepted the necessity of the experience (foreign experience) and the financial soundness for production of HSRP. It was then pointed out that the Supreme court had ultimately upheld these clauses requiring the foreign experience as also requiring the financial soundness. The petitioners have extensively relied upon the State Governments affidavit given before the Supreme Court in the earlier round of litigation wherein the first NIT was challenged. On that basis it was pointed out that in the new NIT the experience clauses were changed. The reference was made to clause Nos. 1. 5. 2 to 1. 5. 6, 2. 3. 2, 4. 14, 2. 13. 4, 2. 30, 4. 1, 4. 1. 2.
On that basis it was pointed out that in the new NIT the experience clauses were changed. The reference was made to clause Nos. 1. 5. 2 to 1. 5. 6, 2. 3. 2, 4. 14, 2. 13. 4, 2. 30, 4. 1, 4. 1. 2. It was reiterated that these clauses as they appeared in the first NIT and were approved by the Supreme Court, were completely changed and diluted so that stringent conditions of the previous experience (foreign experience) as also the conditions regarding the financial feasibility were totally deleted. It is pointed out that in the second NIT the only qualification was the holding of the TAC by the manufacturer which by itself could not guarantee the technical ability and the financial feasibility on the part of a bidding manufacturer. Thus it was pointed out that in the wake of the Supreme Court judgment accepting the stringent conditions regarding the past foreign experience and the soundness of the financial capacity, the State Government could not have changed its policy by making a volt-face. This abrupt change in the policy of the State Government which was described as malicious and mala fide was viewed as a breach of Article 14 being an arbitrary exercise on the part of the State Government. Further the writ petitioner pointed out that the stand taken by the Government in firstly cancelling the first NIT and secondly introducing the second NIT with diluted conditions would amount to direct affront to the Supreme Court judgment which had not only approved the, earlier stringent conditions but also justified the same on various grounds including national security, the enormousness of the project and the requirement of the high technical capability. It was pointed out further that the Supreme Court had clearly observed that the stand of the State Government in the earlier writ petition was that the manufacturer should have access to the requisite technology and should be in a position to upgrade, expand and upscale the operation on a continuous and sustainable basis and as such the removal of the stringent conditions and diluting them was obviously an arbitrary exercise without there being any reasons for the same.
(30) AS against this, the State Government justified its action on various grounds such as the time which has elapsed since the first NIT, it was pointed out that the indigenous manufacturers also had the capacity to manufacture HSRPs. It was suggested further that even in the second nit adequate care was taken to ensure that the best manufacturer suited for the purpose would be selected. A reference was also made to the broadening of the competition area. It is also pointed out that the TAC was available only to such manufacturers who had the capacity both technical as well as financial to produce HSRPs and since the number of the holders of TACs had increased substantially, it was now feasible not to insist upon the foreign experience as a precondition for the manufacturers who offer the bids. Lastly the States stand was that the Supreme Court judgment could not be said to be the deciding factor as the Supreme Court in the aforementioned judgment was only considering the feasibility and the correctness of the earlier NIT and the present NIT was not there for consideration. It is then pointed out that the Supreme Court had not anywhere insisted upon the experience clause and had also not further insisted upon the financial ability clause being in a particular manner. It had merely approved all those stringent conditions in the earlier NIT but had not held that such a clause was compulsory as a condition for the bidders to compete. In short, it was suggested that the Supreme Court judgment could not come in the way of the policy. It is also argued that the change in policy on the part of the State Government had a base of substantial reasons which were both relevant and necessary for such a change. The State government had before it enough material to (31) THE learned Single Judge took the view that the conditions raised by the petitioner were vague and speculative in nature. He held that there was nothing to suggest that the grounds disclosed by the State Government while cancelling the first NIT were factually incorrect. (32) THE learned Judge further held that the earlier tender process was cancelled in the greater public interest and there was no question of any legitimate expectations being entertained by the petitioner. The learned judge also held the allegations about the malice to be baseless.
(32) THE learned Judge further held that the earlier tender process was cancelled in the greater public interest and there was no question of any legitimate expectations being entertained by the petitioner. The learned judge also held the allegations about the malice to be baseless. The learned judge also did not agree that because of the judgment of the Supreme Court, the second NIT should go as it is contrary to the first NIT. Ultimately the learned Judge came to the conclusion that there was no prohibition in the supreme Courts judgment against the change of the policy or diluting of the conditions after reviewing the same. On these grounds, the writ petition came to be dismissed. (33) IN this appeal, Shri Bobde the learned senior Counsel also reiterated the grounds raised in the writ petition and we were also taken extensively through the Supreme Court judgment as also through the conditions of both NITs. Shri Bobde compared both the conditions to suggest that in the second NIT the experience clause was completely eliminated and the clause regarding the financial feasibility was substantially diluted. The learned counsel also argued that this was a highly specialized thing where all and sundry could not be allowed to take part who had no technical capacity, practical experience and more particularly the foreign exposure. The learned counsel greatly stressed over the need to combat danger of terrorism and pointed out that though the countries mentioned in the first NIT were relatively small countries, they were facing the actual danger of terrorism and therefore, the experience in respect of the HSRP in those countries was a must for a manufacturer who was to take up that exercise in India for the first time. (34) SHRI Bobde also extensively took us through the aforementioned judgment of the Supreme Court in Association of Registration Plates (cited supra) and relying on various paragraphs contended that it was a law laid down by the Supreme Court and, therefore, the State could not have taken up a volt face on the stringent conditions contained in the first NIT much less without there being any reasons. Shri Bobde suggested that such a volt face is nothing but an apparent breach of Article 14 as it is both arbitrary and unreasonable.
Shri Bobde suggested that such a volt face is nothing but an apparent breach of Article 14 as it is both arbitrary and unreasonable. (35) WE were also taken through the affidavit filed by Shri D. Mukherjee before the Supreme Court and the affidavit now filed before us at the instance of the State Government (sworn by same Shri D. Mukherjee). The learned counsel tried to show that both the affidavits were contradictory in nature. (36) AS against this, the State Government represented by Shri Das, justified the judgment of the Single Judge and was at pains to point out that this was a matter of policy which was well supported by good reasons. Shri das pointed out that the competition would be widened in the second NIT and that was for the benefit of the State Government. He also pointed out that things had changed drastically in India particularly in the matter of technical amenities and, therefore, the removal of experience clause contained in the first NIT from the second NIT could not be said to be fatal. In this behalf, Shri Das pointed out that there was a scope in the second nit to show that only such manufacturer would be selected who would be technically competent and financially sound. We were taken through the various clauses of the second NIT. (37) DURING the pendency of the appeal, we had directed all other parties who had offered their bids to be joined as parties and all those bidders were noticed who were represented before us by the learned counsel Shri Kapoor, shri Jayanta Mitra, Shri Abhijeet Chatterjee, Shri Dastoor, Smt. N. Patheria/ and Shri Sen. They were heard extensively. All the learned Counsel supported the judgment and opposed the appeal almost on the similar grounds which we have referred to above. It is on this basis that the following questions fall for consideration in this appeal. QUESTIONS FOR DECISION 1. Was the State Government within its rights to cancel the first notice inviting tender and could that decision be termed as arbitrary and in breach of Article 14 of the Constitution"? 1a. Can that decision be challenged by the appellant/petitioner who had withdrawn and accepted the earnest money deposit offered as a bidder in pursuance of that NIT? 2.
Was the State Government within its rights to cancel the first notice inviting tender and could that decision be termed as arbitrary and in breach of Article 14 of the Constitution"? 1a. Can that decision be challenged by the appellant/petitioner who had withdrawn and accepted the earnest money deposit offered as a bidder in pursuance of that NIT? 2. What is the nature of change of conditions in the second NIT and was the WBTID C within its rights to effect the same particularly in view of the judgment of the Supreme Court in Association of Registration Plates upholding the first NIT? 2a. What is the true import of the Supreme Court judgment in Association of Registration Plates ? (38) WE. are dealing with these questions jointly. The decision to cancel the earlier tender process was taken on 27. 4. 2005. We have already given in para 24 the reasons supplied by the State Government to cancel the tender process. The decision was not challenged by the petitioner for a full period of about six months. The writ petition came to be moved only on 1. 11. 2005 i.e. seven months after the decision was taken to cancel the first tender process. In pursuance of the decision, the appellant/ petitioner instead of challenging the decision instantaneously, the appellant proceeded to take back the earnest money deposit. (39) IT was very strongly argued by the respondents that the appellant/ petitioner was hopelesly late in challenging the order dated 27. 4. 2005. They pointed out that at that stage the petitioner had already entered the fray and the abrupt decision to cancel the entire tender process could have been challenged in time which was not done and instead the petitioner chose to wait for the issuance, of the second. NIT and even, after that issuance filed the writ petition only in the last week of November, 2005. It was pointed out that while the basic prayer was the cancellation of the second NIT and the appellant/petitioner had prayed for quashing of the cancellation order dated 27. 4. 2005 only by was of second relief that too after withdrawing the earnest money deposit paid for the first NIT. The contention, therefore, was that there were no bona fides or the locus standi in favour of the appellant/petitioner.
4. 2005 only by was of second relief that too after withdrawing the earnest money deposit paid for the first NIT. The contention, therefore, was that there were no bona fides or the locus standi in favour of the appellant/petitioner. (40) AS against this, Shri Bobde argued that there was nothing wrong in accepting earnest money deposit and there was also nothing unnatural in waiting for the advent of the second NIT. After all the petitioner had felt aggrieved because of the dilution of the stringent conditions and had, therefore, chosen to challenge the second NIT and thereby further prayed for the quashing of the cancellation order dated 27. 4. 2005 as a consequential relief. (41) THE decision to cancel the first NIT was an independent decision. Till then the tender process had progressed substantially inasmuch as all the bidders had offered their bids technically as well as others. The validity of the first NIT was challenged and the Supreme Court had approved of that tender notice or at least had not found fault with the same. In this backdrop when the entire tender process came to be cancelled, the appellant/petitioner would have been well-justified in challenging the same in good time without waiting for the second NIT which by itself would be a different subject. After all very substantial claims of the petitioner were at stake in the first nit and nothing could have stopped them from challenging the NIT cancellation order on the ground that the reasons therefor were either non-existent or were not relevant and that the exercise was mala fide. Had such petition been filed then the reasons given by the State Government in the order of cancellation could have been factually tested both in terms of their existence and veracity. However, that was not done and instead the appellant/ petitioner meekly accepted the cancellation and as if that was not sufficient also withdrew the earnestmoney deposit. In our opinion, therefore, the challenge to the cancellation order is hopelessly belated and any attempt now to find fault for the reasons given in that order is not justfied. In the earlier part of the judgment more particularly in paragraph 24, we have indicated the reasons given by the State Government for the cancellation. We will now test those reasons.
In the earlier part of the judgment more particularly in paragraph 24, we have indicated the reasons given by the State Government for the cancellation. We will now test those reasons. (42) THE first reason that only four numbers of bidders had participated in the tender process was of course a matter of record and at that time as has been found by the learned Single Judge one of the bidders had already withdrawn from the race. The present appellant/petitioner had questioned the eligibility of one more bidder to participate in the tender process. Therefore, at that time, for all practical purposes only two bidders were in the fray. The first reason is, therefore, factually correct. We are not here for testing the justifiability of the first reason but are concerned only as to whether the reason existed in fact. The second reason given was also a fact as the Supreme Court had indeed made observations in paragraph 38 which we have quoted in-paragraph 16 of this judgment. What is the true import of those observations would be dealt with in the latter part of the judgment. However, the fact of the matter is that such reason was factually available to the State Government who were legally competent to determine the terms and conditions for the implementation of the scheme, for HSRPs. The third reason given was that till that date technical bids could not be processed, evaluated and finalised and even the financial bids could not be opened. In our opinion, even this factual position could not and was not disputed by the appellant/petitioner before us or before the learned Trial judge. In this behalf, it must be pointed out that almost two years had elapsed after the first NIT was notified and because of the litigation the bids both technical and financial were not either processed, evaluated and/ or finalised till then. Therefore, this reason also must be held to be factually existing. It was then claimed by way of fourth reason that the State government had come to notice that considerable number of the manufacturers of such HSRPs had obtained the requisite type approval certificates from the approved institutions as per the provisions of the Motor vehicles Act. Now had the writ petition been filed in time, this claim could have been tested factually.
Now had the writ petition been filed in time, this claim could have been tested factually. Even during the debate it was not seriously disputed before us that there are substantial number of manufacturers having the type approval certificates. What was argued before us was that having type approval certificates is an insignificant fact for the grant of tender. Now we cannot ignore the essential conditions both in the first NIT as well as in the second NIT whereby the intending bidder had to have the said type approval certificate. If the number of persons having such type approval certificates was found to have increased substantially, then it cannot be said that it was an insignificant, unconnected or an irrelevant fact. Thus even this reason justified the State Government in favour of the cancellation as one of the few other reasons. Under the settled law, we cannot impregnate the thought process of the State Government and to test whether the State government was justified in taking the decision. The judicial review is available only upto the extent to see whether the reasons for decision had some nexus and were relevant for the purpose. It is not for the Court to judge the correctness of the reasons. To that extent the principle of judicial review will not go. Since having a type approval certificate was a must for the manufacturer before offering the bid, the, substantial increase in the number of such manufacturers is certainly a relevant fact and we do not find any reason to hold that such fact was insignificant or unconnected or irrelevant for the purpose. Therefore, the State Government was justified even for that reason. Lastly the State Government has given the reason of a greater public interest. This, in our opinion, was the most significant reason. Even before us, Shri Das very vociferously canvassed this reason and urged that it was not necessary for the State Government to signify as to how the decision was in the greater public interest and what would be the ramification of that public interest. It was argued before us that undoubtedly the State government had before it the existing narrow competition for the first NIT. If there was any possibility of increasing the area of competition, that would amount to serve a greater public interest because of the financial implications.
It was argued before us that undoubtedly the State government had before it the existing narrow competition for the first NIT. If there was any possibility of increasing the area of competition, that would amount to serve a greater public interest because of the financial implications. Shri Das stated before us that the availability of the more number of manufacturers who because of they having type approval certificates had earned the eligibility to compete with others was undoubtedly a very relevant factor which would have earned more revenue to the State and such would serve greater public interest contemplated under that order. Now all these reasons taken together were neither proved to be factually incorrect nor could be termed as insignificant or irrelevant reasons. Therefore, in our opinion, the appellant/petitioner firstly was guilty of laches and secondly it cannot be said that those reasons have been successfully demolished at its instance. If that is so, an inevitable result must follow that the State Government was within its rights in cancelling the first NIT. In this behalf, it cannot be forgotten that in clause Nos. 2. 31. 1. and 2. 31. 2 the decision of the Managing Director, WBTIDC regarding the evaluation, qualification, opening and award of the bid was final and binding on all the bidders and the right was reserved in favour of the Managing Director to reject any or all offers received from the bidders without assigning any reasons.