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2009 DIGILAW 636 (JK)

Riyaz Ahmad Bhat v. State Of J. &K.

2009-12-11

GH.HASNAIN MASSODI, J.P.SINGH

body2009
J.P. Singh, J. 1. The appellants Writ Petition questioning Director General of Police, Jammu and Kashmir, Srinagars NIT No. 02 of 2009 dated 22.04.2009, inviting sealed Tenders from Original Manufacturers or their Authorized Dealers, having authorization from the manufacturer(s) to quote against the Tender for the supply of various Woolen Items of Police Uniform, indicated as such in the NIT, was dismissed by a learned Single Judge of this Court vide Judgment dated 15.10.2009. He has filed this Letters Patent Appeal questioning the dismissal of his Writ Petition and the Judgment of learned Single Judge. 2. Relying upon Rasbihari Panda etc. v. State of Orissa, reported as AIR 1969 SC, 1081, Ramana Dayaram Shetty v. The International Airport Authority of India, reported as AIR 1979 SC, 1628, Meerut Development Authority v. Association of Management Studies, reported as 2009 (6) SCO, 171 and similar other Judgments on the issue, appellants learned counsel says that the respondents had violated Articles 14 and 19 of the Constitution of India, in depriving the petitioner of his right to compete for the Contract, which the Director General of Police, Jammu and Kashmir, Srinagar had issued permitting only the Original Manufacturers or their Authorized Dealers, to quote their rates for the tendered items, for competition. The action of the State functionaries is questioned as arbitrary, discriminatory and violative of the provisions of the Jammu and Kashmir Financial Code which had been tailor made to exclude the petitioner and other similarly situated persons from the arena of competition, accommodating only a few rather than putting the Tender to competition for all. 3. Per contra, supporting the questioned NIT, and the Judgment of the learned Single Judge, learned State counsel says that a conscious decision had been taken by the Director General, for and on behalf of the Governor of Jammu and Kashmir State, for judicious spending of the public money to procure good quality and timely supply of the items, which were needed by the Police Force of the State. The decision had been taken in the best interest of the Department, to avoid shortfalls, backtracking and procurement of sub-standard material/stocks. 4. According to the learned counsel, the appellants appeal had been rendered infructuous because of the allotment of Contracts, before the filing of the Appeal, to those found eligible therefor and the Letters Patent Appeal may not thus warrant consideration. 5. 4. According to the learned counsel, the appellants appeal had been rendered infructuous because of the allotment of Contracts, before the filing of the Appeal, to those found eligible therefor and the Letters Patent Appeal may not thus warrant consideration. 5. Learned State Counsel relies on Tata Cellular v. Union of India, AIR 1996 SC, 11, Krishnan Kakkanth v. Government of Kerala & Ors., AIR 1997 SC, 128, Association of Registration Plates v. Union of India & Ors., AIR 2005 SC, 469, Directorate of Education & Ors. v. Educomp Datamatics Ltd. & Ors., AIR 2004 SC, 1962 and M/s S.S & Company v. Orissa Mining Corporation Limited, AIR 2009 SC, 461, to support his submissions. 6. We have considered the submissions advanced by learned counsel for the parties at the Bar, gone through the case set up by the parties and perused the Judgment of the learned Single Judge. 7. Principles emanating from the case law, referred to in the impugned judgment, have been culled out by the learned Single Judge, as follows: - "i) The modern trend points to judicial restraint in administrative action. ii) The Court does not sit as a Court of but merely reviews the manner in which the decision was made. iii) The court does not have the expertise to correct the administrative decision. If a review of the administrative decision is permitted it will be substituting its own decision, without the necessary expertise which itself may be fallible. iv) The terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to tender is in the realm of contract. Normally speaking, the decision to accept the tender or award the contract is reached by process of negotiations through several tiers. More often than not, such decisions are made qualitatively by experts. v) The Government must have freedom of contract. In other words, a fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasi-administrative sphere. However, the decision must not only be tested by the application of Wednesbury principle of reasonableness (including its other facts pointed out above) but must be free from arbitrariness not affected by bias or actuated by malafides. vi) Quashing decisions may impose, heavy administrative burden on the administration and lead to increase and unbudgeted expenditure. However, the decision must not only be tested by the application of Wednesbury principle of reasonableness (including its other facts pointed out above) but must be free from arbitrariness not affected by bias or actuated by malafides. vi) Quashing decisions may impose, heavy administrative burden on the administration and lead to increase and unbudgeted expenditure. vii) The award of a 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 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 bonafide 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, its 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 bound vitiated by malafides, unreasonableness and arbitrariness." 8. Relying on the above passages, appearing in various Judgments of Honble Supreme court of India, the learned Single Judge held as follows: - "If the respondents, in the present case, want a better quality of products required and for that matter seek tenders from the original manufacturers or their authorized agents, the petitioner cannot object to it nor can the Court compel the respondents to choose any other dealer/firm for the purpose. Adopting such a method on the part of the respondents does not amount to hostile discrimination and cannot amount to violation of any right of the petitioner. 9. Adopting such a method on the part of the respondents does not amount to hostile discrimination and cannot amount to violation of any right of the petitioner. 9. As a matter of policy, the respondent had taken a conscious decision to deal with the manufacturers and their authorized dealers only to take such a big project instead of dealing with the registered Firms which appears to be a relevant consideration while awarding such a big project where quality is always a paramount consideration. In these circumstances, it was for the respondents to set the terms of the Tender. It does not give monopoly to a particular manufacturer or dealer or all such manufactures or dealers to deal with the manufacturing of items can compete. The Courts could not interfere with the terms of the Tenders notice only on the ground that it excludes from competition the registered Firms which is separate class in itself." 10. Learned Judge had placed reliance on C.K. Achutan v. State of Kerala & Ors., AIR 1959 SC, 490, Where Honble Supreme Court of India had observed as follows: - "It was perfectly open to the Government, even as it is to a private party, to choose a person to their liking, to fulfill contracts which they wish to be performed. When one person is chosen rather than another, the aggrieved party cannot claim the protection of Article 14, because the choice of the person to fulfill a particular Contract must be left to the Government." 11. Finding no fault with the respondents decision to invite only Manufacturers and Authorized Dealers of the manufactures to compete for the notified Tender items, the learned Single Judge considered it apt not to refer to the other points raised by the appellants counsel questioning the terms and conditions of the Contract on the ground that having been found ineligible to enter into the arena of competition, there was no need to go into the questions raised by the appellant. 12. We will first deal with the appellants counsels star argument based on Rasbihari Panda etc. v. State of Orissa, reported as AIR 1969 SC, 1081, placing reliance whereon, the learned counsel questioned the impugned NIT as violative of Article 14 of the Constitution of India. 13. 12. We will first deal with the appellants counsels star argument based on Rasbihari Panda etc. v. State of Orissa, reported as AIR 1969 SC, 1081, placing reliance whereon, the learned counsel questioned the impugned NIT as violative of Article 14 of the Constitution of India. 13. The relevant facts on which the Honble Supreme Court of India had opined on Articles 19(1)(g) and 14 of the Constitution of India in the above mentioned case are that the Government of Orissa had, instead of inviting tenders, offered the option, to purchase Kendu leaves for the year 1968 on terms mentioned therein, to certain old contractors. The reason suggested by the Government that these offers were made because the purchasers had carried out their obligations in the previous year to the satisfaction of the Government, had not been found to be of any significance. It had been found by the Supreme Court that the price fetched at public auctions, before and after January, 1968, were much higher than the prices Kendu leaves were offered to the old contractors. Finding that entering into contracts to the old licensees was open to grave objection, the State Government had contemplated excluding many persons interested in the trade by deciding to invite Tenders for advance purchase of Kendu leaves restricting the invitation to purchase, to those individuals who had carried out the Contracts in the previous year, without default and to the satisfaction of the Government. 14. The Supreme Court of India, accordingly, found that the right to make offers, being opened, to a limited class of persons, it had effectively left out persons in Kendu leaves Trade and also new entrants into the business, which was found to be ex-facie discriminatory, imposing unreasonable restriction upon the right of the persons, other than existing contractors, to carry on business. 15. It was in the above mentioned circumstances, that the Honble Supreme Court of India held the Schemes floated by the Orissa Government violative of Articles 19 (1) (g) and 14 of the Constitution of India. 16. 15. It was in the above mentioned circumstances, that the Honble Supreme Court of India held the Schemes floated by the Orissa Government violative of Articles 19 (1) (g) and 14 of the Constitution of India. 16. The Judgment cited by the learned counsel for the appellant is inapplicable to the facts of the present case, in that, looked from any angle, Director Generals restricting invitation of Tenders to the manufacturers and their authorized dealers, cannot be said to be arbitrary, or for that matter discriminatory, to attract Article 14 of the Constitution of India because the decision so taken demonstrates objectivity, in procuring genuine material, without the intervention of any middleman, thus while ensuring supply of good quality material, ruling out chances of the supply of inferior and sub-standard material. The Director Generals action in this behalf is a step in the right direction, to ensure that the requisite material was supplied to the Government by the best person i.e. the one who either its manufacturer or was entitled to deal in it according to the instructions of the manufacturer, ensuring its quality. 17. The Director General had the option of inviting everyone to compete for the supply of the tender items or to invite those who had actually manufactured it or were legally authorized to deal in it. The choice made by him, cannot be faulted, in that, the central idea of inviting the manufacturers and their authorized dealers to compete for the Tender items was to exclude the possibility of short supply, defective material, or other shortcomings, which the Department had, in the past noticed, when the purchases had been made without devising any restriction on getting supplies from the manufacturers or their authorized dealers. 18. The Director General, was within his power, to prescribe certain pre-conditions or qualifications for the Tenders, to ensure fail-safe and sustainable delivery of the best quality material to the Government. The choice made by him to restrict the Tender to the manufacturers and their authorized dealers does not, in any way, create any monopoly in favour of any particular manufacturer because all the manufacturers of the items and their authorized dealers had been invited to compete. The choice made by him to restrict the Tender to the manufacturers and their authorized dealers does not, in any way, create any monopoly in favour of any particular manufacturer because all the manufacturers of the items and their authorized dealers had been invited to compete. The choice made, cannot thus be said to be in any way arbitrary, particularly when neither any basis has been laid in by the appellant in the Writ Petition nor has it been projected as to how the decision of the Director General, in inviting the manufacturers and their authorized dealers alone, to submit Tenders, was arbitrary or for that matter discriminatory and malafide. 19. The petitioner, not belonging to the class of persons like manufacturers or their authorized dealers cannot thus be heard to project the plea of discrimination which may be contemplated only in case of persons situated similarly and not in the situation in which the petitioner is placed qua the manufacturers or their authorized dealers. 20. In Rasbihari Pandas case, the contractors already in the field of dealing in Kendu leaves and even the new entrants, who were not in any way, otherwise disqualified to participate in the purchase of Kendu leaves, were similarly situated, in dealing with the Government and in this view of the matter, the exclusion of persons other than the contractors who were already in the field, without any justifiable reason, had been found to be arbitrary, which is not, however, the position in the present case. 21. The appellant cannot thus take any benefit of what was held by the Honble Supreme Court of India in Rasbihari Pandas case. 22. We have gone through the appellants pleadings and do not find any specific case to have been set up by him questioning the Director Generals decision as arbitrary, discriminatory, malafide or actuated by any bias. 23. In the absence of any such case having been set up in the Writ Petition and supported by requisite material in support thereof, We are of the view that the learned Single Judge was right in refusing to exercise the power of Judicial Review of the Director Generals action. 24. 23. In the absence of any such case having been set up in the Writ Petition and supported by requisite material in support thereof, We are of the view that the learned Single Judge was right in refusing to exercise the power of Judicial Review of the Director Generals action. 24. We further do not find any merit in the appellants counsels submission that the Tender in question was a limited Tender issuance whereof was forbidden under the provisions of the Jammu and Kashmir Financial Code, in that, the Tender in question inviting for competition, all original manufacturers and authorized dealers to quote for the Tender items, cannot be termed as limited Tender, and even if one were to treat it to be so, the Tender in question which was required to have the approval of the Government through its State Level Purchase Committee, shall be deemed to have been issued reading down the provisions of the Financial Code requiring issuance of limited Tenders for goods beyond an amount of Rs.1000/- without any conditions, in view of the magnitude of the Contract which would not permit open Tender without any restrictions resulting in "trial and error" method which was likely to prove hazardous affecting the supplies. The Director Generals Authority to get the right and most competent person for making the supplies cannot be questioned with the aid of the provisions of the Financial Code. 25. The appellants plea that the terms and conditions of the Tender Notice in so far as it excluded registered Firms to compete for the Tender items were tailor made, to sub-serve the business interests of a class of manufacturers/authorized dealers, too is without any basis, in that, the aforementioned Tender condition appears to have been formulated keeping in account the public interest in spending the Government money for the purchase of genuine material from the manufacturers and their authorized dealers. 26. 26. Appellants counsels last plea that Tender notices issued subsequent to the issuance of the questioned Tender notice, permitting the registered Firms like the appellant, to quote their rates for similar items, was indicative of the fact that the questioned Tender notice was arbitrary, too is untenable, in that, the plea of issuance of subsequent Tender notices by the Director General permitting the registered Firms to participate in competition for quoting rates for items similar to the one appearing in the questioned Tender notice, having not been urged by the appellant in his pleadings before the learned Single Judge, cannot be considered in the absence of any response thereto by the State-respondents, to question the impugned Tender notice. We are further of the view that dilution of the terms and conditions of the Tender for similar items, in the subsequent Tender notices, would not, of itself affect the reasonableness of the decision of the Director General of Police, in inviting only manufacturers of the items and their authorized dealers. The last plea raised by the appellants counsel too, therefore, fails, is, accordingly, rejected. 27. For all what has been said above, We do not find any justifiable reason to interfere with the judgment passed by the learned Single Judge in dismissing the appellants Writ Petition, in Appeal, additionally because the NIT impugned in the Writ Petition has resulted in issuance of Contracts to the parties who are not before us. 28. Found to be without merit, this Appeal is, accordingly, dismissed.