ORDER This writ petition is filed for a mandamus to declare the action of respondent No.2 in seeking to accept the tender of respondent No.3 for the work relating to Aarogyasri documentation in pursuance of tender notification dated 10.9.2012 as illegal and arbitrary. 2. I have heard Mr. Koppula Gopal, learned Counsel for the petitioner, learned Assistant Government Pleader for Medical & Health appearing for respondents 1 and 2 and Mr. K.S. Murthy, learned Counsel representing respondent No.3. 3. Respondent No.2 has issued Tender Notice No.630/H1/2012, dated 10.9.2012, whereunder tenders were invited from the Software Developers for Aarogyasri documentation work for Government General Hospital, Kakinada. In pursuance of the said tender notice, seven agencies have submitted their tenders. They include the petitioner and respondent No.3. Respondent No.2 has eventually selected respondent No.3 for award of contract. Feeling aggrieved by this decision, the petitioner filed this writ petition. 4. The main ground on which the petitioner questioned the action of respondent No.2 in selecting respondent No.3 is that the latter does not possess the pre-requisite conditions stipulated in the tender document relating to incorporation and experience in medical related IT Projects. 5. Respondents 2 and 3 have filed separate counter-affidavits. In the counter-affidavit filed by respondent No.2, it has been conceded that the pre-requisite conditions for being eligible for submitting the tenders inter alia are that the bidder company should have Private Company Limited registration and that the company should have minimum experience of more than two years in medical related IT Projects. It has also been admitted in the counter-affidavit that none of the seven tenderers have submitted the required documents, such as registration and experience certificates, at the time of opening of the tenders on 1.10.2012 and meetings were arranged subsequently and that on 15.10.2012, the representatives of the petitioner and respondent No.3 have attended the meeting. Respondent No.2 sought to justify selection of respondent No.3 mainly on two grounds, namely, that it has offered Rs.473/- per each case, while the petitioner has offered Rs.685/-, and that respondent No.3 has sufficient experience to match the proposed work and that its work was well appreciated by various hospitals, who have engaged their services in the field of Hospital Management. 6. 6. The short question that arises for consideration in this writ petition is whether respondent No.3 possesses pre-requisite qualifications for filing of the tender and award of contract and, if not, whether respondent No.2 is justified in selecting it for award of contract? 7. Annexure-I to the tender schedule prescribed pre-requisites to be considered for submitting the bid for Aarogyasri Data Entry. Conditions 2 and 3 thereof read as under: "(2) The Bidder company should have Private company limited Registration. (3) The Company should have minimum 2+ years of experience in Medical related IT Projects." 8. It is not in dispute that the tender notice was issued on 10.9.2012 and the tenders were filed before 1.10.20 12. On 1.10.2012, the tenders were opened. Admittedly, even according to respondent No.3, its incorporation was approved by the competent authority under the Companies Act on 12.10.20 12. Thus, by the time tender notification was issued, tenders were filed and they were opened, respondent No.3 did not have legal existence as a Registered Private Limited Company. A fortiorari, the question of the Company having minimum of more than two years of experience in medical related IT Projects did not arise. Thus, on the admitted facts of the case, respondent No.3 failed to satisfy both the above re-produced conditions 2 and 3 of Annexure-I of the tender schedule. In strict sense, respondent No.3 was not eligible to file tender because unless it was incorporated as a Private Limited Company on the date of filing of the tenders, it had no eligibility to file such tender. In my opinion, respondent No.2 has committed a serious illegality in considering the purported experience of an agency other than respondent No.3. 9. Even assuming that the management of respondent No.3 would have been involved in executing the medical related IT Projects, under law a Company has a separate legal existence. The tender conditions specifically stipulated that only Private Limited Registered Companies are eligible for filing their bids. Therefore, even if the persons who are in management of respondent No.3 Company had their own experience either individually or as partners of a Firm, the same does not enure to the benefit of respondent No.3. Hence, I have no hesitation to hold that respondent No.3 was not eligible to file its tender, as it did not come into existence as a Registered Private Limited Company when the tenders were filed. Hence, I have no hesitation to hold that respondent No.3 was not eligible to file its tender, as it did not come into existence as a Registered Private Limited Company when the tenders were filed. Equally, as it did not have minimum of two years of experience in medical related IT Projects, the petitioner's tender ought not to have been considered by respondent No.2. 10. Mr. K.S. Murthy, learned Counsel for respondent No.3, submitted that even the petitioner does not have two years experience in medical related IT Projects and that considering the fact that none of the tenderers satisfied the pre-requisite qualifications, respondent No.2 has relaxed the tender conditions in favour of all the tenderers. He further submitted that respondent No.2 was guided by the fact that there is substantial difference in the rates quoted by the petitioner and respondent No.3 and that in order to save public exchequer, he has selected respondent No.3 by accepting its offer. In support of his submissions, the learned Counsel placed reliance on the judgments of the Supreme Court in M/s. G.J. Fernandez v. State of Karnataka and others, AIR 1990 SC 958 , Air India Ltd. v. Cochin International Airport Ltd., (2000) 2 SCC 617 , Sterling Computers Ltd. v. M/s. M&N Publications Ltd., AIR 1996 SC 51 and B.S.N. Joshi & Sons Ltd. v. Nair Coal Services Ltd., (2006) 11 SCC 548 . 11. I have carefully considered the judgments cited by the learned Counsel for respondent No.3. 12. I had an occasion to consider the scope of judicial review with reference to the case law in EFKON AG v. Hyderabad Growth Corridor Ltd., 2012 (1) ALD 453 = 2012 (1) ALT 53 . I can do no better than reproducing the relevant portion of the judgment hereunder: (Paras 9 to 11): "The judgment of the apex Court in Ramana Dayaram Shetty v. International Airport Authority of India, (1979) 3 SCC 489 , created a watermark on the issue relating to award of contracts and scope of judicial review in relation thereto. In its celebrated judgment, the Supreme Court held that the State or its instrumentalities are required to adhere to the tender conditions on the pain of invalidation of the decision in the event of their non-adherence. The subsequent judgments, however, have recognized some "freedom of play in joints" for the employer while finalizing the tenders. 13. In its celebrated judgment, the Supreme Court held that the State or its instrumentalities are required to adhere to the tender conditions on the pain of invalidation of the decision in the event of their non-adherence. The subsequent judgments, however, have recognized some "freedom of play in joints" for the employer while finalizing the tenders. 13. In Tata Cellular v. Union of India, (1994) 6 SCC 651 , the Supreme Court has defined the parameters for judicial intervention 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 powers? 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, (1991) 1 AC 696, 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. 14. It has deduced the following legal principles: 1. The modem trend points to judicial restraint in administrative action. 2 The Court does not sit as a Court of appeal but merely reviews the manner in which the decision was made. 3. The Court does not have the expertise to correct the administrative decision. 14. It has deduced the following legal principles: 1. The modem trend points to judicial restraint in administrative action. 2 The Court does not sit as a Court of appeal but merely reviews the manner in which the decision was made. 3. 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. 4. 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. 5. 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 the 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 mala fides. 6. Quashing decisions may impose heavy administrative burden on the administration and lead to increased and un-budgeted, expenditure. 15. In Air India Limited's case (supra), the Supreme Court held that the award of a contract even by a private party or a public body or the State is essentially a commercial transaction and that in arriving at commercial decision, considerations which are paramount are commercial considerations and that the State can choose its own method to arrive at a decision and fix its own terms of invitation to tender and that is not open to judicial scrutiny. It further held that the State is free to grant any relaxation for bona fide reasons if the tender conditions permit such a relaxation. It however added a caveat that the State, its Corporations and instrumentalities are bound to adhere to the norms, standards and procedures laid down by them and cannot depart from them arbitrarily. It further held that the State is free to grant any relaxation for bona fide reasons if the tender conditions permit such a relaxation. It however added a caveat that the State, its Corporations and instrumentalities are bound to adhere to the norms, standards and procedures laid down by them and cannot depart from them arbitrarily. In several judgments rendered thereafter, the Supreme Court while choosing the path of judicial restraint, however, repeated and reiterated the core jurisprudential principle that where the Constitutional Court is satisfied that the decision making process is vitiated by arbitrariness, irrationality, unreasonableness, bias or mala fides, it is bound to interfere with such a decision. (See: Asia Foundation & Construction Ltd. v. Trafalgar House Construction (I) Ltd. (1997) 1 SCC 738 , Raunaq International Ltd. v. I.V.R. Construction Ltd., (1999) 1 SCC 492 , Air India Ltd.'s case (supra), W.B. SEB v. Patel Engg. Company Ltd., (2001) 2 SCC 451 , Master Marine Services (P) Ltd. v. Metcalfe & Hodgkinson (P) Ltd., (2005) 6 SCC 138 , Reliance Airport Developers (P) Ltd. v. Airports Authority of India, (2006) 10 SCC 1 , B.S.N. Joshi and Sons Ltd. v. Nair Coal Services Ltd. (supra), Jagdish Mandal's case (supra) and Siemens Public Communication Networks (P) Ltd. v. Union of India, (2008) 16 SCC 215)." 16. In the instant case, admittedly, the essential pre-conditions of the registration of Company and the experience of such Company for a period of not less than two years have been completely relaxed. The fact that such a relaxation has also been made in favour of the petitioner would not legalise the otherwise illegal action of respondent No.2 in acting contrary to the essential tender conditions. It is not the pleaded case of respondents 2 and 3 that respondent No.2 has reserved any right to relax the above-mentioned two pre-requisite conditions. Had respondent No.2 not stipulated the stringent conditions relating to pre-requisite qualifications, there would have been a possibility of many other agencies, who did not incorporate themselves as companies and possess the minimum experience of two years as companies, offering their tenders making the tender process more competitive. Perceived from this angle, the plea of respondent No.2 that as the offer made by respondent No.3 was less than that made by the petitioner, its tender was accepted does not stand judicial scrutiny. Perceived from this angle, the plea of respondent No.2 that as the offer made by respondent No.3 was less than that made by the petitioner, its tender was accepted does not stand judicial scrutiny. Even if the petitioner does not satisfy the pre-requisite conditions, that by itself would not legitimize the action of respondent No.2 in selecting respondent No.3. 17. In G.J. Fernandez's case (supra), on which the learned Counsel for respondent No.3 placed heavy reliance, the apex Court while reiterating the earlier principles held that where certain relaxation of non-essential conditions are made and if such relaxations were extended to all the tenderers, such an action is not liable for interference with by the Courts. This judgment, in my opinion, does not help respondent No.3 for the reason that in the said case, the Supreme Court specifically observed that KPC has decided to strictly adhere to the minimum pre-qualification eligibility conditions and that what was relaxed was only the time stipulated for producing the documents in support of the eligibility conditions. 18. In the light of the above discussed settled legal position, I am of the opinion that the selection of respondent No.3 by respondent No.2 is vitiated by patent arbitrariness in the decision making process undertaken by the latter and the •same is, accordingly, declared as illegal. The action of respondent No.2 in selecting respondent No.3 is, accordingly, set aside. Liberty is however given to respondent No.2 to issue a fresh notice with modified tender terms and conditions and finalise the tender strictly in accordance with such tender conditions. 19. The writ petition is, accordingly, allowed to the extent indicated above. 20. As a sequel, WPMP No.41983 of 2012 filed for interim relief is disposed of as intructuous.