SAFE GUARD v. M P STATE AGRICULTURAL MARKETING BOARD
2009-04-22
R.K.GUPTA, R.S.GARG
body2009
DigiLaw.ai
Judgment ( 1. ) THE learned single Judge, while disposing of the respective writ petitions of the appellants by a common order dated 8. 7. 2008 passed in W. P. No. 11972/2007 (M/s Safe Guard vs. M. P. State Agriculture Marketing Board and another), W. P. No. 1154/2008 (M/s Safe Guard Security Agency vs. M. P. State Agriculture Marketing Board and others) and W. P. No. 4774/2008 (M/s balaji Detective and Security Services vs. M. P. State Agriculture Marketing board and others), has declined to interfere with the agreements of the Agency with the Mandi Committees as a consequence of which this batch of writ appeals has been preferred under Section 2 of the M. P. Uchcha Nyayalaya (Khand Nyay peeth Ko Appeal) Adhiniyam, 2005. ( 2. ) IN Writ Appeals No. 811/2008 and 812/2008, the appellant, M/s Safe Guard, has further prayed for quashment of the impugned NIT dated 1. 8. 2007 (Annexure a-10), Corrigendum dated 4. 8. 2007 (Annexure A-11) issued by the Respondent no. 1 and the agreement executed between the first respondent, M. P. State agriculture Marketing Board (for short "the Board") and the third respondent, m/s Balaji Detective and Security Services in pursuance of the NIT. ( 3. ) IN Writ Appeal No. 930/2008; the appellant M/s Balaji Detective and Security. Services has prayed for a direction to the respondent-Board to enter into the agreement with the appellant in respect of 72 Mandi Committees mentioned in writ Petition No. 11972/2007 and has further prayed for quashing of all the contracts and agreements entered into by the third respondent- M/s Safe Guard with various mandi Samitis after expiration of the original agreement dated 29. 10. 2002. ( 4. ) FROM the aforesaid reliefs sought in the appeals it is discernible that the reliefs sought for, as such, are interrelated and the questions of fact and law involved in the petitions also being identical, all the three appeals were heard analogously and are being disposed of by this singular order. ( 5.
10. 2002. ( 4. ) FROM the aforesaid reliefs sought in the appeals it is discernible that the reliefs sought for, as such, are interrelated and the questions of fact and law involved in the petitions also being identical, all the three appeals were heard analogously and are being disposed of by this singular order. ( 5. ) THE facts which are relevant for the purpose of adjudication of these writ appeals are obtained from W. A. No. 811/2008 which state that the appellant, M/s safe Guard Security Agency (in short as "the appellant-Agency"), which is a proprietorship firm carries on its business of providing security services to various government and non-government organizations had entered into an agreement with the Board in the year 1995 for providing security guards to all the Mandi committees in the State of Madhya Pradesh which was further extended from time to time and remained in existence till September, 2001. In the year 2002, the respondent-Board issued directions vide its letter dated 20. 11. 2002 to all the secretaries of Mandi Committees of the State that in case the Mandi Committees want to employ the security guards, they may employ the security guards from the appellant-Agency as per the agreement that had already been entered into between them on the basis of tender which was accepted by the Board. As per the format of said agreement, initially the agreement was to be for a period of two years, with the stipulation that it was further extendable by mutual consent up to three years on the rate accepted by the Board. After expiry of the period of three years some of the Mandi Committees further entered into agreement with the appellant Agency for the period upto 31. 12. 2008. In the meantime, on receipt of some Complaints about monopoly of the appellant Agency from 1995, the Board directed to issue fresh Notice Inviting Tender (NIT) on 24. 12. 2005 for a fresh agreement for providing security to all Mandi Committees and thereafter second amended NIT was issued for inviting applications between 15. 2. 2006 to 1. 3. 2006. Subsequently, again two amended NITs were issued for the period between 2. 3. 2006 to 31. 3. 2006 and 1. 4. 2006 to 17. 4. 2006. ( 6.
12. 2005 for a fresh agreement for providing security to all Mandi Committees and thereafter second amended NIT was issued for inviting applications between 15. 2. 2006 to 1. 3. 2006. Subsequently, again two amended NITs were issued for the period between 2. 3. 2006 to 31. 3. 2006 and 1. 4. 2006 to 17. 4. 2006. ( 6. ) THE appellant-Agency challenged the aforesaid NITs before the Gwalior bench of this Court in W. P. No. 1972/2006 on the ground that since the Agency had already entered into an agreement and the period of contract was extended by some of the Mandi Committees upto 31. 12. 2008 on same terms and conditions, therefore, the Board could not have invited fresh tenders for all the Mandis and the said action of the Board was in breach of the agreement already executed by the Board. The learned single Judge of Gwalior Bench of this Court vide its order dated 23. 8. 2006 passed in W P. No. 1972/2006 refused to interfere in the contractual matter holding that after the period of contract, the fresh NIT could be invited ultimately, the said writ petition was dismissed with cost. ( 7. ) AGAINST the aforesaid decision of learned single Judge rendered in W. P. No. 1972/2006, an appeal was preferred by the appellant-Agency, which was registered as W. A. No. 259/2006. It was contended on behalf of the appellant-Agency that Mandi Committee being an independent statutory body created under the provisions of the Madhya Pradesh Krishi Upaj Mandi Adhiniyam, 1972 (for short as "the 1972 Adhiniyam") was within its power to extend the period of agreement and by issuing fresh NIT the rights of the Mandi Committee to enter into the agreement could not have been curtailed and on this basis the appellant-Agency was entitled to be protected. Eventually, the Division Bench (Gwalior) of this Court vide its judgment delivered on 17th July, 2007 held that Mandi Committees can also engage the security services of any security agency by independently entering into agreements and declined" to interfere with the agreements of the appellant-Agency with the Mandi Committees as their period was upto 31. 12. 2008. The Division Bench refused to interfere with the agreements on the foundation that it would amount to shutting of the right of Mandi Committees to enter into agreements.
12. 2008. The Division Bench refused to interfere with the agreements on the foundation that it would amount to shutting of the right of Mandi Committees to enter into agreements. Undisputedly, the said petition was restricted to 11 Mandi Committees which were falling within the territorial jurisdiction of the Gwalior Bench of this court. ( 8. ) IT is contended on behalf of the appellant-Agency that perpetuating the illegality, the Board issued another NIT on 1. 8. 2007 (Annexure A/10 to W. A. No. 811/2008) for 320 Mandi Committees and later on finding that there are only 237 Mandi Committees in the State of M. P. barring 11 Mandi Committees in respect of which there was already an order of the Gwalior Bench of this Court, the board issued a corrigendum dated 3. 8. 2007 (Annexure A/11 ). According to the appellant-Agency they intimated the Board about the order of the Division Bench (Gwalior) of this Court passed in W. A. No. 259/2007 that the Agency had entered into contract with 72 Mandi Committees in whole of the State of M. P. and, therefore, the issuance of NIT for such Mandi Committees was uncalled for. The alleged apathy of the Board led to filing of writ petitions before this Court challenging the aforesaid NITs dated 1. 8. 2007 and corrigendum dated 3. 8. 2007, which were registered as W. P. No. 11972/2007. Initially, vide order dated 7. 9. 2007 the learned single Judge of this Court granted stay against the NITs in respect of 72 Mandi committees, which are mentioned in para 9 of the writ appeal) for which the appellant-Agency was found to have already entered into agreement with the Mandis. ( 9. ) IT seems that during the pendency of the W. P. No. 11972/2007, the NITs were issued by the Board and M/s Balaji Detective and Security Services (India)Pvt. Ltd. (in short "the respondent-Company"), which also engages itself in the business of providing security services, submitted its tender in pursuance of the nit issued by the Board for 237. Mandi Committees. The tender submitted by the company on being found lowest was accepted but it was stated that agreement could only be signed in respect of 165 Mandis.
Mandi Committees. The tender submitted by the company on being found lowest was accepted but it was stated that agreement could only be signed in respect of 165 Mandis. In this background, the said Company approached this Court by filing W. P. No. 4774/2008 making a prayer for issuance of direction against the Board to execute a contract with respect to those Mandi committees also with whom the Agency had entered into agreements on the ground that time period of some of the agreements of the Agency with Mandi Committee had also expired and a false statement was made in the petition that all the agreements with 72 Mandi Committees are valid upto 31. 12. 2008. ( 10. ) AS mentioned above, the learned single Judge vide common order dated 8. 7. 2008 has disposed of the aforesaid writ petitions and the decision has such has been challenged in this batch of writ appeals. ( 11. ) BEFORE we advert to the rival submissions put forth on behalf of the parties it would be appropriate to refer to the order passed by us on 3. 3. 2009, which reads as under:- "shri Mrigendra Singh, learned counsel for the appellants in writ Appeal Nos. 811/2008 and 812/2008. Shri Naman Nagrath, learned counsel for the appellant in Writ appeal No. 930/2008. Shri Nagrath appears for M/s Balaji Detective and Security Services (I) Pvt. Ltd. In Writ Appeal Nos. 811/2008 and 812/2008,1. A. Nos. 14285/ 2008 is an application for intervention while I. A No. 14288/2008 is an application by the appellant to grant him permission to continue the existing agreement. I. A. No. 1638/2009 is an application for taking certain documents on record (it has been filed by the respondent Nos. 1 and 2 ). Undisputedly, in the year 2002, tenders were invited and the present appellant No. 1, M/s Safe Guard, GF-3 was selected as the Security agency, being the lowest, for providing the services. The agreement was entered into between all the Mandis of Madhya pradesh and the appellant for a period of two years with a further stipulation that the agreement can be continued for a further period of one year. The period accordingly was to expire in 2005. However, some of the Mandis entered into agreement with the present appellant for a further period of three years. Somewhere, in February 2008, the respondent Nos.
The period accordingly was to expire in 2005. However, some of the Mandis entered into agreement with the present appellant for a further period of three years. Somewhere, in February 2008, the respondent Nos. 1 and 2 invited the tenders for providing security services. Undisputedly, the appellant No. 1 or the appellant No. 2, for and on behalf appellant No. 1, did not take part in the tender process. Respondent No. 3 took part in the tender process and, undisputedly, was selected as the service provider having provided the lowest rate for providing the services. The appellant, thereafter, filed a writ petition in the High Court submitting, inter-alia, that the action on the part of the respondent nos. 1 and 2 is patently illegal. It was submitted before the learned single Judge that the Board has no power or authority to float the tenders, issue notice inviting tenders and select one of the agencies. Along with the writ petitions, applications for interim orders were also filed. The present appellant of Writ Appeal No. 930/2008 submitted before the learned single Judge that in view of his selection as the service provider, interim order could not be granted. After hearing the parties, vide order dated 8. 7. 2008 learned single Judge refused to interfere in the matter but, however, observed that he would not interfere with the agreements of the agency with the Mandi committees which were valid upto 31. 12. 2008. He also directed that the Board shall be at liberty to take a decision in accordance with the provisions of the Madhya pradesh Krishi Upaj Mandi Adhiniyam, 1972 in respect of those agreements of the Agency whose time period has already expired. The petitions were finally disposed of, therefore, the M/s Safe guard have filed Writ Appeal Nos. 811/2008 and 812/2008 while m/s Balaji have filed Writ Appeal No. 930/2008. On an earlier occasion we had issued an interim order that the State Government and so also the respondent Nos. 1 and 2 shall inform us that under what authority of law they could call for the tenders and appoint the respondent No. 3 as the security agency. Mandi Committee has filed its reply and State Government has also filed its say.
1 and 2 shall inform us that under what authority of law they could call for the tenders and appoint the respondent No. 3 as the security agency. Mandi Committee has filed its reply and State Government has also filed its say. Shri Mrigendra Singh, learned counsel for the appellants placing reliance upon Section 54 of the Act submitted that the managing Director of the Board would only have certain powers in relation to inspection, enquiry, to examine the written statements, account, etc. and may require a market committee to take into consideration any objection on the ground of illegality etc. and may direct the Mandi committee that anything, which is about to be done or is being done, should not be done and anything, which should be done but is not being done, should be done within such time as the Managing Director may direct. It is submitted by him that the Mandi Board or the Managing Director have no powers to appoint a security agency for all the Mandis. Shri Naman Nagrath, learned counsel for the respondent No. 3, however, submitted that the present appellant having secured or reaped the fruits of the earlier tender process for a long period of six years, now cannot be allowed to take a somersault and say that the action of the Mandi Board or the Managing Director is bad. It is submitted by him that the appellant does not have any equity in his favour nor has a moral right to challenge the action of the respondent-Board especially when it had taken the advantage of the earlier action of the Board. He also referred to Section 59 of the Act and submitted that the Managing Director has the powers to look into the legality or propriety of the decision taken or order passed and as to the regularity of the proceedings of the committee. He also referred to Section 46 (F) of the Act and submitted that the Board shall have powers to supervise and control over the agricultural marketing committee. He also referred to section 25 of the Act and submitted that a Mandi committee would be entitled to enter into agreements relating to purchase, sale, lease, mortgage or other transfer of, or acquisition of, interest in immovable property etc.
He also referred to section 25 of the Act and submitted that a Mandi committee would be entitled to enter into agreements relating to purchase, sale, lease, mortgage or other transfer of, or acquisition of, interest in immovable property etc. but as Section 25 does not refer to a service contract, the Mandi Committee would not be entitled to enter into such an agreement without the permission and consent of the Managing Director/board. Shri Samdarshi Tiwari, learned counsel for respondent Nos. 1 and 2 adopting the arguments raised by Shri Naman Nagrath further submitted that the present appellant is facing criminal prosecution because of the fraud played by him in relation to certain agreements and under the circumstances, the present appellant would not be entitled to a discretionary order in his favour. Shri T. S. Ruprah, learned Additional Advocate General, however, submitted that the State Government is entitled to issue directions under Section 40-A and in this case the State has no comments to make. Shri Tiwari and Shri Ruprah, learned counsel for the Mandi board and the State, however, submitted that looking to the notices inviting tender, the fact that present appellant did not take part in the tender process and that he is facing criminal prosecution also that he has taken advantage of the earlier tender process, at this stage, he would not be entitled to any relief and these respondents have no objection, if the person who has submitted the lowest rates, is given the authority to enter into agreement with all the Mandi Committees. We have gone through the provisions of law and have also heard the parties at length. Undisputedly, the appellant had taken the advantage of the tender process from February 2002 to 2005 and thereafter got the agreements with number of the Mandi Committees renewed. It is also to be seen from the records that the present petitioner-appellant started challenging the process only after everything was settled in favour of the respondent No. 3. At this stage, taking into consideration the fact that the petitioner-appellant had taken advantage of the earlier tender process and continued with all the Mandi Committees for a period of three years and got number of the agreements renewed for further period of three years, we are of the opinion that at this stage there is no equity in favour of the appellants.
The interim orders granted earlier are vacated. The respondent Nos. 1 and 2 are hereby directed to issue directions to all Mandi Committees to enter into security services agreement with the respondent No. 3. Such direction shall be issued by the respondent Nos. 1 and 2 preferably within one week and the Mandi Committee would be obliged to enter into agreement within one week further on the rates, as approved by the respondent Nos. 1 and 2. The appeals, in fact, have been heard at length, it is, therefore, directed that the appeals be listed for final hearing on 17th March, 2009. Certified copy of this order must be supplied to all the parties today itself. " ( 12. ) WE have been informed by learned counsels appearing for the parties that against the said interim order dated 3. 3. 2009 a special leave petition was preferred before the Honble Supreme Court, which has been dismissed. In view of the dismissal of the said SLP, the interim order passed by us on 3. 3. 2009 has attained finality. As is evident from the order dated 3. 3. 2009, after taking into account submissions of learned counsel appearing for the parties, we had directed the mandi Board to enter into agreement with M/s Balaji and the agreement as such has been entered into between them. ( 13. ) SHRI Mrigendra Singh, learned counsel appearing for the appellant-Agency submitted that in view of the judgment passed by a Division Bench (Gwalior) of this Court in W. A. No. 259/2006 wherein it has been held that the Mandi Committee has the discretion and power to enter into agreement with the appellant, therefore, no direction could have been issued by the Managing Director of the Board which is the Apex Body for entering into agreement with M/s Balaji, the Company. It is also contended by him that in view of Section 25 (2) of the 1972 Adhiniyam, the secretary of the Marketing Committee may execute contract or agreement on behalf of the market committee where the amount or value of such contract or agreement does not exceed rupees one thousand regarding matters in respect of which he is generally or specially authorized to do so by a resolution of the market committee. He relied upon sub-clauses (b) and (c) of Sub-Section (2) of Section 25 of the 1972 Adhiniyam.
He relied upon sub-clauses (b) and (c) of Sub-Section (2) of Section 25 of the 1972 Adhiniyam. It is further contended on behalf of the appellant-Agency that the Managing Director of the Board has no power to issue the NIT or to fix the conditions of the tender form. It is also submitted by him that the conditions as enumerated in the tender form had been very onerous with the result neither the appellant-Agency nor the respondent-Company was eligible to apply against the same and since the respondent-Company though submitted its tender but it was not eligible in terms of the conditions laid down in the tender form, therefore, no tender in its favour could have been accepted by the Managing director. Another submission of Mr. Singh is that the conditions in the tender form to the extent that a tenderer has to give the names and details of the employees along with license numbers of their guns and that it was a necessary condition that the parties submitting the tenders had to submit the police verification and medical certificates with respect to the persons those who were to be deployed in various Mandi Committees, were very onerous because until the tender is accepted it is very difficult to supply the names of such personnel who will be employed by the security agencies i. e either by the appellant agency or the respondent-company. It is further submitted by him that initially though the tender was issued for 320 Mandi Committees which is clear from the NIT, Annexure-A-10, but subsequently a corrigendum was issued for 237 Mandi Committees, which is Annexure-A-11, and further 11 Mandi Committees in respect of which stay order was in force from the Gwalior Bench, such Mandi Committees could not have been impleaded for issuance of tender. It is also contended that subsequently an application was filed about 72 Mandi Committees which had already entered into agreement with the appellant agency and they were also protected. In the light of aforesaid submissions it is submitted by Shri Singh, learned Counsel appearing for the appellant-agency that the respondent-company M/s Balaji should not have been given tender for all the 237 Mandi Committees. ( 14.
In the light of aforesaid submissions it is submitted by Shri Singh, learned Counsel appearing for the appellant-agency that the respondent-company M/s Balaji should not have been given tender for all the 237 Mandi Committees. ( 14. ) IN support of his various submissions detailed above, Shri Singh has placed reliance upon various decisions rendered by the Apex Court in Ramana Dayaram shetty v International Airport Authority of India and others, 1979 (3) SCC 489 , Sterling Computers Limited v. M/s Mand N Publications Limited and others. 1993 (1) SCC 445 , Laxmi Sales Corpn. V. Bolangir Trading Co. and others, 2005 (3) SCC 157 , Air India Ltd. v. Cochin International Airport Ltd. and others, 2000 (2) SCC 617 , W. B. State Electricity Board v. Patel Engineering Co. Ltd. and others. 2001 (2) SCC 451 , Tata Cellular v. Union of India, 1994 (6) SCC 651 . ( 15. ) ON behalf of the respondent-company, M/s Balaji, it is submitted that the appellant-agency, in fact, has entered into agreement with various Mandi committees on the basis of letter issued by the Managing Director of the Board. It is also contended that even after the expiry of initial period of two years the contract was extended in favour of the appellant-Agency by the Mandi Committees for a period of another one year. After expiry of period of another one year again the contract was entered into. The extension of such contracts had been only under the authority of the Managing Director. In the backdrop of these submissions shri Nagrath submitted that in the past, the appellant-agency itself was the beneficiary of the orders/directives issued by the Managing Director, therefore, at this stage when the NIT. issued by the Managing Director has already been accepted by him, and the appellant-agency being the beneficiary of an alleged wrong, did not challenge the authority of the Managing Director for a considerable long period, it is not open for the appellant-agency to challenge the authority of the Managing Director that he has no authority to issue the NIT. It is also contended by him that under the provisions of the Madhya Pradesh Krishi Upaj mandi Adhiniyam, 1972 the Managing Director has ample power to control the affairs of the Mandi Committees. ( 16. ) THE rival submissions advanced on behalf of the parties are considered. ( 17.
It is also contended by him that under the provisions of the Madhya Pradesh Krishi Upaj mandi Adhiniyam, 1972 the Managing Director has ample power to control the affairs of the Mandi Committees. ( 16. ) THE rival submissions advanced on behalf of the parties are considered. ( 17. ) IT is true that the appellant-Agency Was the beneficiary of the directives issued by the Managing Director to various different Mandi Committees to enter into agreement with the appellant-Agency only. This aspect of the matter has been taken into account by us in our order dated 3. 3. 2009 and we came to the conclusion that once the appellant-Agency being the beneficiary had taken advantage of the directives of the Managing Director for a long time then it is not open for the appellant-Agency to challenge the NIT issued by the Managing director. It is also not correct to say that only the Managing Director had issued the advertisement/nit without getting approval from the Board, because a bare perusal of the opening words of the NIT (Annexure P-10) clearly reveals that the managing Director on behalf of the Board had issued the said NIT and the head office of the Board required security personnel in the headquarter of the Board and also in other Mandi Committees of the State. Another aspect of the matter is that at no point of time the Board had ever objected to the NIT issued in the name of Managing Director. For these reasons, the submission so put forth on behalf of the appellant-Agency that the Managing Director has no power to issue the NIT is unacceptable. ( 18. ) IN none of the petitions before the learned single Judge the appellant-Agency ever challenged the authority of the Managing Director to issue the NIT. The only ground which was raised was that since the appellant-Agency had entered into an agreement with the Mandi Committees for a period ending 31. 12. 2008, therefore, the Managing Director should not have issued the NIT for other security agencies to supply the security guards. ( 19.
The only ground which was raised was that since the appellant-Agency had entered into an agreement with the Mandi Committees for a period ending 31. 12. 2008, therefore, the Managing Director should not have issued the NIT for other security agencies to supply the security guards. ( 19. ) WE have perused the minutes of the tender proceedings and on the basis of the record it is clear that police verification and medical certificate with respect to the security personnel to be deployed was not initially to be submitted by the tenderers but the same was to be submitted at the time of deployment. It would not be out of place to mention that in the NIT (Annexure A-10) condition as such was not imposed. Though the appellant-agency was not deprived of purchasing the tender form, yet it did not purchase the tender form, it is because there was no such stipulation as pleaded and urged. This leads to another issue, whether the condition which was waived by the tender committee for submitting the said information along with the tender form whether was an essential qualification. The answer has to be in the negative. The reason is that if whole of the tender proceedings is to be appreciated then there is no dispute that it was so floated by the Board for the deployment of the security agencies and the personnel employed by the security agencies were required to act as security guards in different Mandi committees including headquarter of the Board. The deployment of the personnel has to be done after the tender of any agency or firm is accepted. Thus, no one can expect and it was also not possible that any security agency submitting the tender would submit medical certificates and also the police verification at the time of submitting the tender form. Submission of police verification and medical certificates was the condition to come in force at the time of deployment of security guards i. e. only after when the tender is accepted and, therefore, the condition as such cannot be treated to be the essential qualification or eligibility for supply of tender form. In this context, it would be pertinent to refer to the relevant condition no. 5 at Page-133 of the paper-book filed in W. A. No. 811/2008 which deals with the necessary qualifications of the tenderers.
In this context, it would be pertinent to refer to the relevant condition no. 5 at Page-133 of the paper-book filed in W. A. No. 811/2008 which deals with the necessary qualifications of the tenderers. The condition No. 5 in question is reproduced in its Hindi and English version as under:-[emphasis applied] (5) Police verification and medical fitness certificate by the competent doctor (government doctor) of the employees employed with the tenderer/agency who would work in this institution will have to be submitted along with the tender. " (ENGLISH TRANSLATION) ( 20. ) A strict interpretation of the said condition would make the said condition which is said to be essential as unworkable because of the words used therein are "in this institution". The tender was invited for 320 Mandi Committees. Subsequently, corrigendum was issued for 237 Mandi Committees. Once the said qualification itself provides for "in this institution" and does not provide "in the institution" for the deployment of the security personnel then apparently that cannot be called to be an essential condition for submitting the tender form. In this reference, we may profitably refer to a decision rendered by the Apex Court in g. J. Fernandez v. State of Karnataka and others, (1990) 2 SCC 488 . The relevant paragraphs 13 and 14 from the said decision read as under:- "13, Interesting as this argument is, we do not see much force in it. In the first place, although, as we have explained above, para V cannot but be read with para I and that the supply of some of the documents referred to in para V is indispensable to assess whether the applicant fulfills the pre- qualifying requirements set out in para I, it will be too extreme to hold that the omission to supply every small detail referred to in para V would affect the eligibility under para I and disqualify the tenderer. The question how far the delayed supply, or omission to supply, any one or more of the details referred to therein will affect any of the prequalifying conditions is a matter which it is for the KPC to assess. We have seen that the documents having a direct bearing on para I viz. regarding output of concrete and brick work had been supplied in time.
We have seen that the documents having a direct bearing on para I viz. regarding output of concrete and brick work had been supplied in time. The delay was only in supplying the details regarding "hollow cement blocks" and to what extent this lacuna affected the conditions in para 1 was for the KPC to assess. The minutes relied upon show that, after getting a clarification from the general Manager (Technical), the conclusion was reached that "the use of cement hollow block masonry may not be required at all and instead the brick masonry may be used". In other words, the contract was unlikely to need any work in hollow cement blocks and so the document in question was considered to be of no importance in judging the prequalifying requirements. There is nothing wrong with this, particularly as this document was eventually supplied. 14. Secondly, whatever may be the interpretation that a Court may place on the NIT, the way in which the tender documents issued by it has been understood and implemented by the KPC is explained in its "note", which, sets out the general procedure which the KPC was following in regard to NITs issued by it from time to time. Para 2. 00 of the "note" makes it clear that the KPC took the view that para I alone incorporated the "minimum pre-qualifying eligibility conditions" and the data called for under para V was in the nature "general requirements". It further clarifies that while tenders will be issued only to those who comply with the pre-qualifying conditions, any deficiency in the general requirements will not disqualify the applicant from receiving tender documents and mat data regarding these requirements could be supplied later. Right or wrong, this was the way they had understood the standard stipulations and on the basis of which it had processed the applications for contracts all along. The minutes show that they did not deviate or want to deviate from this established procedure in regard to this contract, but on the contrary, decided to adhere to it even in regard to this contract. They only decided, in view of the contentions raised by the appellant that para V should also be treated as part of the pre-qualifying conditions, that they would make it specific and clear in their future NITs that only the fulfilment of pre-qualifying conditions would be mandatory.
They only decided, in view of the contentions raised by the appellant that para V should also be treated as part of the pre-qualifying conditions, that they would make it specific and clear in their future NITs that only the fulfilment of pre-qualifying conditions would be mandatory. If a party has been consistently and bona fide interpreting the standards prescribed by it in a particular manner, we do not think this Court should interfere though it may be inclined to read or construe the conditions differently. We are, therefore, of opinion that the High Court was right in declining to interfere. The view taken by the Apex Court in G. J. Fernandez (supra) has again received consideration of the Apex Court in its decision B. S. N. Joshi and Sons ltd. v. Nair Coal Services Ltd. and others, 2006 (11) SCC 548 . In para-66 of this judgment, the Apex Court has laid down the following principle with regard to special review in relation to essential qualifications:- "8. We are also not shutting our eyes towards the new principles of judicial review which are being developed; but the law as it stands now having regard to the principles laid down in the aforementioned decisions may be summarized as under : (i) If there are essential conditions, the same must be adhered to; (ii) If there is no power of general relaxation, ordinarily the same shall not be exercised and the principle of strict compliance would be applied where it is possible for all the parties to comply with all such conditions fully; (iii) If, however, a deviation is made in relation to all the parties in regard to any of such conditions, ordinarily again a power of relaxation may be held to be existing (iv) The parties who have taken the benefit of such relaxation should not ordinarily be allowed to take a different stand in relation to compliance of another part of tender contract, particularly when he was also not in a position to comply with all the conditions of tender folly, unless the court otherwise finds relaxation of a condition which being essential in nature could not be relaxed and thus the same was wholly illegal and without jurisdiction.
(v) When a decision is taken by the appropriate authority upon due consideration of the tender document submitted by all the tenderers on their own merits and if it is ultimately found that successful bidders had in fact substantially complied with the purport and object for which essential conditions were laid down, the same may not ordinarily be interfered with. (vi) The contractors cannot form a cartel. If despite the same, their bids are considered and they are given an offer to match with the rates quoted by the lowest tenderer, public interest would be given priority. (vii) Where a decision has been taken purely on public interest, the Court ordinarily should exercise judicial restraint. " Keeping in view the aforesaid principle laid down in para-66 of its judgment by the Apex Court, in the present case it is to be seen that the principle of stria compliance of the said condition No. 5 on which heavy reliance was placed and which has been reproduced in the earlier paragraph of this judgment, cannot be applied in the present case because the person who is submitting the tender from does not know whether his tender would be accepted so that he will submit medical and police verification with respect to all the security personnels to be deployed in a particular Mandi Committee. It is not a case of the appellant agency that condition which are enumerated in the NIT (Annexure A-10) have not been complied to the respondent-Company i. e. M/s Balaji. ( 21. ) IN view of aforesaid discussion, we are of the view that even though the company, M/s Balaji had not submitted the document with respect to the police verification and medical certificate of its personnels to be deployed after acceptance of tender as security guard, the argument put forth on behalf of appellant agency cannot be accepted because it had not purchased the tender form. As is evident from the minutes of the tender proceedings produced before us, out of 10 parties who purchased the tender form excluding the Company whose rates were found to be lowest, it was accepted, other nine parties who submitted the tender have not come before the Court or before us making a grievance that tender conditions were onerous.
As is evident from the minutes of the tender proceedings produced before us, out of 10 parties who purchased the tender form excluding the Company whose rates were found to be lowest, it was accepted, other nine parties who submitted the tender have not come before the Court or before us making a grievance that tender conditions were onerous. The tender committee has also directed that at the time of deployment of security personnels M/s Balaji, the company had to submit the information with regard to police verification and medical certificate before deploying them in the concerned Mandi Committees. ( 22. ) THAT apart, it is manifest that in none of the two petitions filed by the appellant agency before the learned Single Judge challenge was made to the NIT on the ground that the conditions enumerated in the tender form were onerous, therefore, he could not apply for the same. In this reference the grounds raised and reliefs prayed for by the appellant-agency in both the writ petitions before the learned single Judge can profitably be taken note of. The grounds and reliefs prayed for by appellant-agency in W. P. No. 11972/2007 is reproduced as under:- " (6) Grounds: (A) That, the NIT Annexure P/1 and amended NIT Annexure P/2 are absolutely illegal and without authority of the law and therefore the same are liable to be set aside. The Mandi Board i. e. respondent no. 1 has no authority, jurisdiction under the law to invite tender to provide security and security agency to the Mandi Samities without there consent. (B) That, even otherwise the issuance of NIT by the respondent. Board with respect to 72 Mandi Samities to whom the petitioner has entered into an agreement to provide for the security guards is absolutely illegal and same is unsustainable in the eyes of law. (C) That, the impugned NIT issued by the respondent Board are otherwise illegal as the contract depends on the consent of the parties whereas by nominating the agency entrusted of contract to the Krishi Upaj Mandi Samities, is no contract in the eyes of law. In this view of the matter also the NIT issued by the respondent Board is liable to be set aside.
In this view of the matter also the NIT issued by the respondent Board is liable to be set aside. (D) That, once the judgment as rendered by this Honble Court which attained finality between the parties the respondent board being statutory body created under the law of the M. P. Krishi Upaj Mandi Adhiniyam, 1972 is not within its rights to issue again NIT for the similar cause. In this view of the matter the NIT issued by the respondent Board is ab initio void. (7) RELIEF SOUGHT: in view of the facts mentioned in para 6 above the petitioner prays that a writ of mandamus or certiorari any other suitable writ, direction may kindly be issued and following relief may be granted to the petitioner: (i) That, the NIT Annexure P/1 and amended NIT Annexure P/ 2 may kindly be directed to be set aside. (ii) That, it may be held that the respondent Board has no jurisdiction and power to assign security agency compelling the Krishi Upaj mandi Samities to enter into contract and it may also be held that Krishi Upaj Mandi Samities of the State of M. P. are free to enter into agreement in terms of section 7 (2) of M. P. Krishi upaj Mandi Adhiniyam, 1972 for providing security. (iii) That, the other relief doing justice including cost be awarded. " The grounds and reliefs prayed for by appellant-agency in W. P. No. 1154 2008 is reproduced as under :- " (6) Grounds: 6. 1 For that the impugned letter/order dated 7. 1. 2008 (Annexure P/1) directing the Respondent No. 3 to execute an agreement for providing security guards to the establishment of the respondents is per se illegal and arbitrary for the reason that the Respondents have already entered into an agreement with the petitioner for providing security guards to the establishment of answering respondents and the 237 Mandis established in the State. The same being in force the impugned order/letter 7/1/2008 deserves to be set aside. 6. 2 For that the impugned letter/order dated 7/1/2008 has been issued in a post haste manner in order to grant the contract to their blue eyed person, i. e. Respondent No. 3 for the reason that the Honble Court in a similar matter (Writ Petition no.
6. 2 For that the impugned letter/order dated 7/1/2008 has been issued in a post haste manner in order to grant the contract to their blue eyed person, i. e. Respondent No. 3 for the reason that the Honble Court in a similar matter (Writ Petition no. 11972/2007 M/s Safeguard Security Agency v/s MP State agriculture Marketing Board) was pleased to stay the effect and the operation of the NIT (Annexure P/3 and P/4) so far as the 72 Mandis are concerned for the reason that the petitioner has already executed an agreement with these Mandis, but the Respondents has now issued the impugned letter so far as the remaining 165 Mandis are concerned in order to circumvent the order passed by the Honble Court. The same being an outcome of mala fide deserves to be set aside. 6. 3 For that as the matter pertaining to issuance of NIT (Annexure p/3 and P/4) is sub-judice before the Honble Court in Writ petition No. 11972/2007 (M/s Safeguard Securities v/s MP state Agriculture Marketing Board) therefore the respondents should have restrained themselves from issuing the impugned order which is consequential to the NIT, as the same will effect the rights of the petitioner. Hence, the impugned order. smacks malafide and therefore deserves to be set aside. (7) RELIEF SOUGHT: in the facts and circumstances of the case, the petitioner prays for the following reliefs:- (i) To issue a writ in the nature of Certiorari quashing the impugned letter/order dated 7/1/2008 issued by the Respondent No. 2. (ii) To issue a writ m the nature of certiorari quashing the agreement (if any) executed between the Respondent no. 1 and respondent No. 2, which is consequential to the letter dated 7/1/2008 (Annexure P/1 ). (iii) To issue a command directing the respondents to produce the entire record pertaining to the present petition for kind perusal of the Honble Court. (iv) Any other relief, which in the facts and circumstances of the case, the petitioner may be found entitled, may also be granted in favour of the petitioner. " ( 23. ) SHRI Samdarshi Tiwari, learned Government Advocate appearing for the board produced the record of the tender file and the tender proceedings before us.
(iv) Any other relief, which in the facts and circumstances of the case, the petitioner may be found entitled, may also be granted in favour of the petitioner. " ( 23. ) SHRI Samdarshi Tiwari, learned Government Advocate appearing for the board produced the record of the tender file and the tender proceedings before us. As is evident from the tender proceedings, total 10 tender forms were sold, which were purchased by the following security service providers :- (1) M/s Balaji Detective and Security Service, Bhopal (2) M/s World Wild Security Organization, Bhopal (3) M/s Ideal Security Service, Bhopal (4) M/s Bharat Security Service, Bhopal (5) M/s S. S. I. Security Service, Bhilai (C. G.) (6) M/s Bombay Intelligence and Security Service, Bhopal (7) M/s Visual Simoram Ltd. , New Delhi (8) M/s S. S. V. Security Service, Gurgaon (Haryana) (9) M/s Checkmate Security Service, Bhopal (10) M/s Oford Security Service, Jabalpur. It is further seen that the tender forms so received were opened before the committee on 27. 11. 2007 and as per the record four tender forms, which were received for providing security service for the State Mandi Committees, were opened and a comparative assessment of the same is as under:- ( 24. ) FROM the aforesaid narration of the tender proceedings, it is clear that the rates quoted by M/s Balaji Detective and Security Service, Bhopal were found to be the lowest. It is also clear as noon day that the appellant-Agency had not ever purchased the tender form. A condition in the tender form was enumerated that while submitting the tender, the parties had also to submit the names of security personnels who were to be deployed along with their gun licence number. It is also not the case of the appellant-Agency that they have come to know from other sources that the conditions of the tender had been onerous. Keeping this important aspect of the matter in view, once the tender form had not been purchased by the appellant-Agency, it is difficult to conceive that the appellant-Agency did not apply because the conditions of the tender form were onerous. ( 25.
Keeping this important aspect of the matter in view, once the tender form had not been purchased by the appellant-Agency, it is difficult to conceive that the appellant-Agency did not apply because the conditions of the tender form were onerous. ( 25. ) THAT part, these grounds as such were also not raised before the learned single Judge in the petitions by the appellant-Agency and argument that the conditions of the tender form were onerous has only been advanced before us on behalf of the appellant-Agency during the course of hearing. In our opinion, writ appeal being a rectificatory jurisdiction, it is not open for a party to raise a new factual ground which was not raised before the learned single Judge, as has been held by the Apex Court in Sanjay Kumar and others v. Narinder Verma and others, 2006 (6) SCC 467 . The relevant para-13 of the same, reads as under:- "13. Mr. Raju Ramachandran, learned senior counsel appearing for the third respondent in Civil Appeal Nos. 5430-34 of 2004, however, urged that one of the grounds of challenge before the division Bench was that the statutory qualification was discriminatory. He, therefore, contended that in view of the said contention it was open to the High Court to read down the offending rule instead of striking it down. Having read the portion of the impugned judgment on which this argument is based, we are not satisfied that such a contention was really urged. It is not in dispute that the writ petitions were not directed towards challenge to the applicable Rules. Merely because an argument was made in the letters patent appeal that the Rules were discriminatory, it is not open to the High Court to have struck down the Rules. The Letters patent appeals could have proceeded only on the basis of the writ petitions and the judgment of the learned Single Judge, which was being challenged. There being no substantive challenge to the rules, there was no question of striking down the Rules, nor was there any situation of reading down the Rules. Reliance placed by mr. Raju Ramachandran on the judgment of this Court in Umesh chandra Shukla v. Union of India is of no avail.
There being no substantive challenge to the rules, there was no question of striking down the Rules, nor was there any situation of reading down the Rules. Reliance placed by mr. Raju Ramachandran on the judgment of this Court in Umesh chandra Shukla v. Union of India is of no avail. That was entirely a different situation where this Court was of the view that the applicable Rules had not been followed as the select list had been interfered with by exercising a power which did not arise from rule 18 of the applicable Rules to fix the minimum marks in order to include candidates in the final select list. Such is not the situation before us and, therefore, this authority is of no help to us. " ( 26. ) AS far as the submission advanced on behalf of the appellant-Agency that the respondent-Company M/s Balaji should not have been given tender for all the 320 Mandis is concerned, after scrutiny of the record from all spectrums it is observed that the agreement of the appellant-Agency was to expire on or before 31. 12. 2008 with all the Mandi Committees. The Mandi committees entered into agreement even beyond the extended period of one year though initially a direction was issued by the Managing Director to enter into agreement for a period of two years, which was extendable for a further period of one year. Under these circumstances, we are of the view that issuance of the NITs for all the 320 Mandi Committees by the Managing director was not an arbitrary act on his part. But, however, we may clarify that as per the corrigendum to the NIT i. e. Annexure A-11 and minutes of the tender proceedings, the contract could be entered into by the respondent-Company only in respect of 165 Mandi Committees for which tender was accepted by letter dated 2. 2. 2008 (Annexure A-1 page-125 of paper-book) and subsequently after expiry of the period of the contract with the appellant-Agency with other Mandi Committees after 31. 12. 2008, the Managing Director was/is within its power to direct the other Mandi Committees to enter into agreement with the respondent-Company, M/s Balaji. The similar direction had been issued by us in Our order dated 3. 3. 2009, which has been affirmed by the Apex Court. ( 27.
12. 2008, the Managing Director was/is within its power to direct the other Mandi Committees to enter into agreement with the respondent-Company, M/s Balaji. The similar direction had been issued by us in Our order dated 3. 3. 2009, which has been affirmed by the Apex Court. ( 27. ) ON behalf of the respondent-Board it is contended that under the provisions of the 1972 Adhiniyam, the Managing Director enjoys sufficient power of control and supervision over different Mandi Committees. Learned counsel referred to Clause (c) of Sub-Section (1) of Section 54 which Provide that the Managing Director may call for from a market committee written statements, accounts or report which he may think fit to require such committee to furnish. He has further invited our attention to Section 46-F which defines the power of the Board with regard to exercise of supervision and control over the agricultural market committee. In this reference. Section 25 of the Act is also relevant which relates to the mode of making contracts by the Mandi Committee. According to the same, providing security personnel is not described under Section 25 of the Act, therefore, market committee has no power to enter into agreement. It is also submitted that whatever action has been taken by the Managing Director of the Board in issuing the nit and corrigendum and thereafter accepting the bid in favour of the respondent-Company, in the absence of any objection by the appellant-Agency the acts done by the Managing Director have to be treated as approved by the Board, as the Board never objected to the acts of the Managing Director. ( 28. ) THE next plank of submission raised on behalf of the appellant-Agency is that the Managing Director should not have directed the Mandi Committees to enter into agreement when the tender of the respondent-Company was accepted. In this context Shri Mrigendra Singh, learned counsel appearing for appellant-Agency has placed heavy reliance on the judgment passed by the Division Bench (Gwalior) of this Court in W. A. No. 25 9/2006 (supra ). In this regard, we, however, only deem it fit to see whether procedure of fairness was adopted or not in inviting the tenders. The tenders were invited on all india basis.
In this regard, we, however, only deem it fit to see whether procedure of fairness was adopted or not in inviting the tenders. The tenders were invited on all india basis. Such a tender could only be floated by an apex body who has control in the affairs of different Mandi Committees situated within the State of Madhya Pradesh. The national level tender could not have been invited by the local Mandi Committees which are the small units. In the interim order passed by us on 3. 3. 2009, the powers vested with the Mandi Board and the managing Director in different Sections of the 1972 Adhiniyam have already been taken note of. To recapitulate the submission of Shri Nagrath, counsel appearing for the Company, Section 59 of the Act vests the power with the managing Director to look into the legality or propriety of the decision taken or order passed and as to the legality or propriety of the proceedings of the committee, the Board has power under Section 46-F to supervise and control over the agricultural marketing committee and that under Section 25 a Mandi committee would be entitled to enter into agreement relating to purchase, sale, lease, mortgage or other transfer of, or acquisition of, interest in immovable property etc. but Section 25 does not refer to a service contract therefore, Mandi Committee would not be entitled to enter into such an agreement without the permission and consent of the Managing Director board. ( 29. ) IN the backdrop of the aforesaid provisions of the 1972 Adhiniyam, we are disposed to think that it all appears to be in fairness by the Board or Managing director to invite the tenders and bring transparency in their modus operandi and guide the local Mandi Committees which are small units in proper perspective. Once the tender was accepted, the Managing Director has only intimated the different Mandi Committees to enter into an agreement subject to their financial position and in case they require the security personnel. This is clear from the document dated 2. 2. 2008 (Annexure A-1) which is filed at Page No. 125 of the paper book of W. A. No. 811/2008.
This is clear from the document dated 2. 2. 2008 (Annexure A-1) which is filed at Page No. 125 of the paper book of W. A. No. 811/2008. The Managing Director by writing the said letter has specifically intimated the different Mandi Committees that they can enter into agreement in a prescribed proforma enclosed to the said data keeping in view their financial position and need for deploying the security personnel. Keeping in view the contents of the letter dated 2. 2. 2008 we are not inclined to hold that any direction as such was issued by the Managing Director necessarily to enter into an agreement with the Company but it was only an intimation. The mandi Committees would have refused to enter into agreement and that was within their power but Surprisingly enough the appellant-Agency has not brought on record any document of any of the Mandi Committees that they would not enter into an agreement with the Company, M/s Balaji. In these circumstances, we are not inclined to hold that any direction as such was issued to different mandi Committees necessarily to enter into agreement with the Company, M/s balaji. ( 30. ) AS mentioned hereinabove, Shri Mrigendra Singh, learned counsel appearing for the appellant-Agency had relied on the authority of various decisions of the apex Court, which we shall now dwell upon one by one. ( 31. ) THE question, with regard to raising of objection in relation to a condition prescribed in the tender form by a person who did not submit tender, has been considered by the Apex Court in Ramana Dayaram Shettys (supra ). Learned counsel for the appellant has placed heavy reliance on para-9 of the said decision, which is reproduced as below :- "that takes us to the next question whether the acceptance of the tender of the 4th respondents was invalid and liable to be set aside at the instance of the appellant. It was contened on behalf of the 1st and the 4th respondents that the appellant had no. locus standi to maintain the writ petition since no tender was submitted by him and he was a mere stranger.
It was contened on behalf of the 1st and the 4th respondents that the appellant had no. locus standi to maintain the writ petition since no tender was submitted by him and he was a mere stranger. The argument was that if the appellant did not enter the field of competition by submitting a tender, what did it matter to him whose tender was accepted; what grievance could he have if the tender of the 4th respondents was wrongly accepted. A person whose tender was rejected might very well complain that the tender of someone else was wrongly accepted, but, it was submitted, how could a person who never tendered and who was at no time-in the field, put forward such a complaint? this argument, in our opinion, is misconceived and cannot be sustained for a moment. The grievance of the appellant, it may be noted, was not that his tender was rejected as a result of improper acceptance of the tender of the 4th respondents, but that he was differentially treated and denied equality of opportunity with the 4th respondents in submitting a tender. His complaint was that if it were known that non-fulfilment of the condition of eligibility would be no bar to consideration of a tender, he also would have submitted a tender and competed for obtaining a contract. But he was precluded from submitting a tender and entering the field of consideration by reason of the condition of eligibility, while so far as the 4th respondents were concerned, their tender was entertained and accepted even though they did not satisfy the condition of eligibility and this resulted in inequality of treatment which was constitutionally impermissible. This was the grievance made by the appellant in the writ petition and there can be no doubt that if this grievance were well founded, the appellant would be entitled to maintain the writ petition. The question is whether this grievance was justified in law and the acceptance of the tender of the 4th respondents was vitiated by any legal infirmity. " A careful reading of the aforesaid it. is quite vivid that the grievance of the appellant therein was that he was denied equal treatment and because of the differential treatment equality of opportunity was denied to him while submitting the tender.
" A careful reading of the aforesaid it. is quite vivid that the grievance of the appellant therein was that he was denied equal treatment and because of the differential treatment equality of opportunity was denied to him while submitting the tender. But in the present case, as we have already taken note Of the fact that in the NIT (Annexure A-10) there was no condition as such on which reliance is placed on behalf of the appellant-Agency. It was not the case of the appellant-Agency and we have also held that the appellant-Agency was not prevented from purchasing the tender form and any discrimination was practised in this regard. It is nobodys case that the appellant was prevented from purchasing the tender form, therefore, it is not a case of differential treatment by the Mandi Board or the Managing Director or by anybody else with the appellant-Agency. ( 32. ) IN support of argument with regard to condition No. 5 as discussed above, the appellant-Agency has placed reliance on decision of the Apex Court in Sterling computers Ltd. s (supra) and relying upon para-19 it is submitted that the condition was onerous and the Board ought not to have relaxed the condition in favour of m/s Balaji. The said para reads as under:- "if the contract has been entered into without ignoring the procedure which can be said to be basic in nature and after an objective consideration of different options available taking into account the interest of the State and the public, then Court cannot act as an appellate authority by substituting its opinion in respect of selection made for entering into such contract. But, once the procedure adopted by an authority for purpose of entering into a contract is held to be against the mandate of article 15 of the Constitution, the courts cannot ignore such action saying that the authorities concerned must have some latitude or liberty in contractual matters and any interference by court amounts to encroachment on the exclusive right of the executive to take such decision. " From the aforesaid it is noticeable that once the procedure adopted by an authority for the purposes of entering into contract is held to be against the mandate of Article 14 of the Constitution, the courts cannot ignore such action saying that the authorities concerned must have some latitude or liberty in contractual matters.
" From the aforesaid it is noticeable that once the procedure adopted by an authority for the purposes of entering into contract is held to be against the mandate of Article 14 of the Constitution, the courts cannot ignore such action saying that the authorities concerned must have some latitude or liberty in contractual matters. In our opinion, the condition as such was not essential one and the employer shall have power to relax the conditions which are not essential and for that we have already placed reliance on B. S. N. Joshis case (supra ). Therefore, the aforesaid decision of the Apex Court in Sterling Computers Ltd. (supra) is of no help to the appellant-Agency. ( 33. ) THE learned counsel for the appellant has further relied upon para 77 of the decision rendered by the Apex Court in Tata Cellulars (supra), which is reproduced as under:- "the duty of the court is to confine itself to the question of legality, its concern should be: 1. Whether a decision-making authority exceeded its power? 2. Committed an error of law, 3. committed a breach of the rules of natural justice, 4. reached a decision which no reasonable tribunal would have reached or, 5. abused its powers. Therefore, it is not for the court to determine whether a particular policy or particular decision taken in the fulfilment of that policy is fair. It is only concerned with the manner in which those decisions have been taken. The extent of the duty to act fairly will vary from case to case. Shortly put, the grounds upon which an administrative action is subject to control by judicial review can be classified as under:- (i) Illegality: This means the decision-maker must understand correctly the law that regulates his decision-making power and must give effect to it. (ii) Irrationality, namely, Wednesbury unreasonableness. (iii) Procedural impropriety. The above are only the broad grounds but it does not rule out addition of further grounds in course of time. AS a matter of fact in R. v. Secretary of State for the Home Department, ex. Brind, Lord Diplock refers specifically to one development, namely, the possible recognition of the principle of proportionality. In all these cases the test to be adopted is that the court should, "consider whether something has gone wrong of a nature and degree which requires its intervention".
Brind, Lord Diplock refers specifically to one development, namely, the possible recognition of the principle of proportionality. In all these cases the test to be adopted is that the court should, "consider whether something has gone wrong of a nature and degree which requires its intervention". Similarly, another judgment passed by the Apex Court in W. B. State electricity Board (supra) has been relied upon on behalf of the appellant. The relevant para-7 on which our attention is invited is as follows :- "mr. P. Chidambaram, the learned senior counsel appearing for respondents Nos. 1 to 4, argued that in Annexures 1 to 9 which comprised of 749 items there were mistakes in only 37 items due to the fault of the computer; the nature of mistake was not arithmetic (which would mean in multiplication or addition) but mechanical, attributable to the computer and that such mistakes are not covered by clause 29 of the ITB; in a case of an unintended mistake, a Court of equity would not be a silent spectator and the high Court, being both a Court of law and equity, had rightly directed the appellant to permit correction of the mistakes by respondents Nos. 1 to 4. It was submitted that having regard to the nature of the mistakes, the appellant itself ought to have sought clarification from the said respondents under clause 27 of ITB instead of evaluating the bid on the basis of an unintended unit rate to reach an astonishing figure which was wholly disproportionate to the cost of the Project. His contention is that once the total bid price is maintained, the unit rate is a matter of arithmetic exercise which should have been corrected by the appellant; further the mode of payment by the appellant for the work done is not on the basis of each unit but on the basis of bid price. Accepting that the bid price is unalterable, the unit rate should be regarded as adjustable. It was also argued by the Chidambaram that there was no mistake in giving the unit rate as such; the mistake was in giving the conversion equivalent in US Dollars and, therefore, the correction not being the one falling under clause 29 of the ITB was rightly permitted to be corrected by the High Court. Finally, he contended that their bid being less than the bids of respondents Nos.
Finally, he contended that their bid being less than the bids of respondents Nos. 11 and 10 by Rs. 40 crores and Rs. 80 crores respectively, the High court rightly directed consideration of the bid of respondents Nos. 1 to 4 after due correction of the bid documents in public interest which did not warrant interference by this Court. " On a careful perusal of the aforesaid paragraphs from which inspiration is sought to be drawn are only the submissions which are recorded by the Apex court and not the ratio of the said decision. ( 34. ) LEARNED counsel for the appellant has commended as to the decision of the apex Court in Air India Ltd. (supra ). The relevant para-7 on which reliance is placed is reproduced as under:- " The law relating to award of a corporations and bodies acting as instrumentalities and agencies of the Government has been settled by the decision of this Court in R. D. Shetty v. International Airport Authority, (1979) 3 SCC 498 : ( AIR 1979 SC 1628 ); Fertilizer Corporation Kamgar Union v. Union of India, (1981)1 SCC 568 : (AIR 1981 SC %44); Asstt. Collector, Central Excise v. Dunlop India Ltd. , (1985) 1 SCC 260 : ( AIR 1985 SC 330 ); Tata Cellular v. Union of India, (1994)6 SCC 651 : (1994 AIR SCW 3344 : AIR 1996 SC 11 ); Ramniklal n. Bhutto v. State of Maharashtra, (1997) 1 SCC 134 : (1997 air SCW 1281 : AIR 1997 SC 1236 ) and Raunaq International ltd. v. I. V. R. Construction Ltd. , (1999) 1 SCC 492 : (1999 AIR scw 53 ; AIR 1999 SC 393 ). The award of contract, whether it is by a private party or by a public body or the State, is essentially a commercial transaction. In arriving at a commercial decision considerations which are of paramount are commercial considerations. The State can choose its own method to arrive at a decision. It can fix its own terms of invitation to tender and that is not open to judicial scrutiny. It can enter into negotiations before finally deciding to accept one of the offers made to it. Price need not always be the sole criterion for awarding a contract. It is free to grant any relaxation, for bona fide reasons, if the tender conditions permit such a relaxation.
It can enter into negotiations before finally deciding to accept one of the offers made to it. Price need not always be the sole criterion for awarding a contract. It is free to grant any relaxation, for bona fide reasons, if the tender conditions permit such a relaxation. It may not accept the offer even though it happens to be the highest or the lowest. But the state, is corporations, instrumentalities and agencies are bound to adhere to the norms, standards and procedures laid down by them and cannot depart from them arbitrarily. Though that decision is not amenable to judicial review, the Court can examine the decision making process and interfere if it is found vitiated by mala fides, unreasonableness and arbitrariness. The State, is corporations, instrumentalities and agencies have the public duty to be fair to all concerned, Even when some defect is found in the decision making process the Court must exercise its discretionary power under article 226 with great caution and should exercise it only in furtherance of public interest and not merely on the making out of a legal point. The Court should always keep the larger public interest in mind in order to decide whether its intervention is called for or not. Only when it comes to a conclusion that overwhelming public interest requires interference, the Court should intervene. " From the aforesaid, it is clear that the said decision itself empowers the state to relax a condition for the benefit if tender condition permits such a relaxation. It is also clear from the aforesaid that the State can fix its own term of invitation to tender and that is not open to judicial scrutiny. It can enter into negotiations before finally deciding to accept one of the offers made to it. It is free to grant any relaxation, for bona fide reasons. As we held in earlier paragraphs, keeping in view the Apex Court decision in B. S. N. Joshis case (supra) the condition which is said to be essential by the present appellant was in fact, not the essential condition, therefore, non-fulfilment of the same while submitting the tender would not invalidate the tender submitted by the Company. ( 35. ) THE paragraphs 12 and 13 of the decision rendered in Laxmi Sales Corpn.
( 35. ) THE paragraphs 12 and 13 of the decision rendered in Laxmi Sales Corpn. (supra) on which reliance has been placed on behalf of the appellant-Agency read as under:- we have heard the argument of the learned counsel for the parties and perused the record. In our opinion, the High Court was not justified in coming to the conclusion that production of the documents mentioned herein above along with the tender form was not mandatory and the High Court was also not justified in coming to the conclusion that neither the rules and conditions governing the tender nor the advertisement calling for tender made it mandatory for an intending tenderer to produce those documents and specially proof of turnover for the relevant year 2001-02. We have already noticed from the various conditions in the tender form and annexures annexed thereto that production of supporting documents wherever applicable in Annexure I and J was one of the requirements of the tender and Annexure J specifically required at Sl. No. 7 the proof of turnover of the firm over the last two relevant years with supporting documents. The same annexure also required the tenderer to produce proof of work experience for the last two years with full details and supporting documents and the checklist had Specifically mentioned that the production of proof of turnover with latest profit and loss account duly certified by a Chartered Accountant-was a mandatory requirement. 13. In this background we are unable to accept the finding of the high Court that there was no mandatory requirement of the production of the above documents. As a matter of fact the High court erred in coming to the conclusion in para 6 of its judgment in the writ petition that "the advertisement in Annexure-1 to the writ petition only states that for Bolangir-Bhawanipatna, a tenderer must have a turnover of Rs. 25 lakhs, but it does not anywhere state that audited profit and loss account has to be submitted by a tenderer showing a turnover of Rs. 25 lakhs". This finding of fact as noticed by us hereinabove is contrary to records and is an error apparent on face of the record. " The Apex Court in the aforesaid decision has held that the conditions were essential which could not have been relaxed.
25 lakhs". This finding of fact as noticed by us hereinabove is contrary to records and is an error apparent on face of the record. " The Apex Court in the aforesaid decision has held that the conditions were essential which could not have been relaxed. In the present case, we have already held earlier that the conditions sought to be challenged in this case cannot be treated to be essential condition because it was not possible to submit police verification and medical certificates with respect to the persons who are to be deployed in a private Mandi Committee. Therefore, keeping in view the nature of the clause itself this cannot be treated to be essential condition. In the NIT (Annexure A-10) the requirement was that a party submitting the tender must have at least 700 security personnel with them. It is not the case that 700 employees were not employed with the Company, M/s Balaji. It is also not a case of the appellant-Agency that they were fulfilling the conditions as enumerated in the nit by employing 700 employees in different Mandi Committees with them. ( 36. ) IN view of the aforesaid discussion, the Writ Appeals No. 811/2008 and 812/2008 deserve to be dismissed. ( 37. ) SO far as Writ Appeal No. 930/2008 filed by M/s Balaji Detective and Security is concerned, we are only inclined to observe that as the Board had accepted the tender of M/s Balaji vide their letter dated 2. 2. 2008 (Annexure A-1 at page 125 of the paper-book of W. A. No. 811/2008) only with respect to 165 Mandi committees, therefore, the contract could be entered with respect to those 165 mandi Committees only. We may also observe that the agreement shall be for a period of two years only from the date it is entered into as per the conditions of tender. So far as Other Mandi Committees are concerned, the Managing Director, the respondent No. 1 shall be free to issue fresh NIT in accordance with law. ( 38. ) BEFORE we part with the case, it would be necessary for us to observe with respect to Section 40-A of the 1972 Adhiniyam, which relates to the power of the state Government to give direction. This Section has been inserted by the M. P. Act No. 27 of 1997 (w. e. f. 15-6-1997 ).
( 38. ) BEFORE we part with the case, it would be necessary for us to observe with respect to Section 40-A of the 1972 Adhiniyam, which relates to the power of the state Government to give direction. This Section has been inserted by the M. P. Act No. 27 of 1997 (w. e. f. 15-6-1997 ). By virtue of this new Section, the State government has retained the power to give direction to the Board and other Mandi committees. Sub-Section (2) of Section 40-A further provides that the Board and the Mandi Committees shall be bound to comply with directions issued by the state Government under sub-Section (1 ). In the present case, it is noticed that in spite of the fact that initial period of contract for the 72 Mandi Committees was of two years with the appellant-Agency, which after expiry was further extendable by further period of one year only. There was no further extension, yet the Mandi committees entered into agreement with the appellant-Agency. Under these circumstances, there was anomalous situation with respect to power of the Board to give direction to the Mandi Committees to enter into agreement with the appellant-Agency. The documents as such have been filed to show that the Mandi committee also entered into the agreement against the original agreement issued by the Board. We only hope and trust that there would be an occasion for the state Government for exercising the powers vested with it under Section 40-A of the 1972 Adhiniyam to avoid the said anomalous situation and action in this regard shall be taken by the State Government without any further delay. ( 39. ) IN view of the aforesaid discussion, the Writ Appeals No. 81172008 and 812/2008 are dismissed accordingly. The W. A. No. 930/2008 stands allowed in part. There shall be no order as to costs. Order accordingly.