Judgment : SANJAY KUMAR, J. Award of the contract relating to formation of a reservoir across Gangamma Sirassuvanka near Nalgampalle Village and a diversion system for supplying drinking water to Palamaner Town in Chittoor District, by the Government of Andhra Pradesh to M/s.BVSR Constructions Private Limited (hereinafter, ‘BVSRCL’) was called in question by the unsuccessful tenderer, M/s.PLR Projects Private Limited (hereinafter, ‘PLRPL’), in Writ Petition No.20878 of 2011. The ground of attack in the writ petition was that BVSRCL did not fulfill the eligibility criteria as it failed to furnish the requisite Earnest Money Deposit (EMD) of Rs.8,86,700/-as per the tender conditions, having submitted a demand draft for Rs.8,70,000/-only. By order dated 25.11.2011, a learned Judge of this Court held against PLRPL and dismissed its writ petition. The learned Judge, though he was of the opinion that BVSRCL had failed to comply with the mandatory tender condition of uploading a demand draft for the stipulated EMD amount, concluded that exercise of discretionary jurisdiction under Article 226 of the Constitution was not warranted on the facts of the case. Aggrieved by the dismissal of the writ petition, PLRPL filed Writ Appeal No.1329 of 2011 while BVSRCL preferred Writ Appeal No.82 of 2012 challenging the finding of the learned Judge that furnishing of the requisite EMD amount, by uploading a scanned copy of the demand draft for the stipulated sum, was a mandatory condition and that the authorities had no power to waive or relax the same. Arising out of the same judgment and revolving around the same issue, these two writ appeals are amenable to a conjoined adjudication. Hence, this common order. It is not in dispute that BVSRCL did not furnish the EMD as per the tender conditions. The subject e-procurement tender notice IFB No.08/2010-11 dated 01.10.2010 spelt out that the estimated contract value was Rs.8,86,67,548/-and that the bid security to be offered was Rs.8,86,700/-. This bid security or EMD was to be furnished in the form of a demand draft or an irrevocable bank guarantee, valid for a period of six months. All the bidders were required invariably to upload scanned copies of such demand draft/bank guarantee. Admittedly, BVSRCL uploaded a demand draft made out for Rs.8,70,000/-only and not for Rs.8,86,700/-. The issue before the learned Judge was whether this failure of BVSRCL rendered its bid ineligible. The learned Judge was of the opinion that it did. All the bidders were required invariably to upload scanned copies of such demand draft/bank guarantee. Admittedly, BVSRCL uploaded a demand draft made out for Rs.8,70,000/-only and not for Rs.8,86,700/-. The issue before the learned Judge was whether this failure of BVSRCL rendered its bid ineligible. The learned Judge was of the opinion that it did. BVSRCL questions this conclusion in its appeal. As the learned Judge denied relief despite finding against BVSRCL, PLRPL is also in appeal. Award of a contract, whether it is by a private party, 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 which would normally not be open to judicial scrutiny. 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 the decision as such is not amenable to judicial review, the Court can examine the decision making process and interfere if it is vitiated by malafides, unreasonableness or arbitrariness. The State, its corporations, instrumentalities and agencies have the public duty to be fair to all concerned. However, even if some defect is found in the decision making process, the Court must exercise its discretionary power under Article 226 of the Constitution with great caution and should do so 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 the conclusion that overwhelming public interest requires interference, the Court should intervene [AIR INDIA LTD. v. COCHIN INTERNATIONAL AIRPORT LTD. (2000) 2 SCC 617 ]. As pointed out by the Supreme Court in STERLING COMPUTERS LIMITED v. M&N PUBLICATIONS LTD. (1993) 1 SCC 445 ,in contracts having a commercial element the Court would not question and adjudicate every decision taken by an authority. v. COCHIN INTERNATIONAL AIRPORT LTD. (2000) 2 SCC 617 ]. As pointed out by the Supreme Court in STERLING COMPUTERS LIMITED v. M&N PUBLICATIONS LTD. (1993) 1 SCC 445 ,in contracts having a commercial element the Court would not question and adjudicate every decision taken by an authority. In some special circumstances, discretion has to be conceded to the authority that has to enter into a contract giving it the liberty to assess the overall situation for the purpose of taking a decision as to whom the contract be awarded and at what terms. If such a decision is taken in a bonafide manner, though strictly not in accordance with the norms laid down by the Courts, the Supreme Court was of the opinion that the decision should be upheld on the principle that the Court, while judging the constitutional validity of an executive decision, must grant certain measure of freedom of ‘play in the joints’ to the executive. This Court is also mindful of the distinction drawn by the Supreme Court, in PODDAR STEEL CORPN. v. GANESH ENGINEERING WORKS (1991) 3 SCC 273 , as to the nature of requirements in a tender notice -those which lay down essential conditions of eligibility and those which are merely ancillary or subsidiary to the main object to be achieved by the condition. The Supreme Court was of the opinion that in the case of essential conditions, the authority issuing the tender may be required to enforce them rigidly but in the case of the latter category, it would be open to the authority to deviate from and not insist upon strict literal compliance in appropriate cases. Summarizing the law on the point in B.S.N.JOSHI & SONS LTD. v. NAIR COAL SERVICES LTD. Summarizing the law on the point in B.S.N.JOSHI & SONS LTD. v. NAIR COAL SERVICES LTD. (2006) 11 SCC 548 , the Supreme Court observed: “66.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 condition, 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 with another part of the tender contract, particularly when he was also not in a position to comply with all the conditions of tender fully, 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.” In the backdrop of the above principles, the present controversy would necessarily turn upon the nature and character of the subject tender conditions pertaining to furnishing of EMD. The tender notice dated 01.10.2010, while dealing with the procedure for bid submission, stipulates under Clause 3 as follows: “3. The tender notice dated 01.10.2010, while dealing with the procedure for bid submission, stipulates under Clause 3 as follows: “3. Hard copies: i) Vide ref.G.O.Ms.No.174, I&CAD dept dated: 1-9-2008, submission of original hard copies of the uploaded scanned copies of DD/BG towards EMD by participating bidders to the tender inviting authority before the opening of the price bid is dispensed forthwith. ii) All the bidders shall invariably upload the scanned copies of DD/BG in eProcurement system and this will be the primary requirement to consider the bid responsive. [Emphasis is ours] iii) The department shall carry out the technical evaluation solely based on the uploaded certificates/documents, DD/BG towards EMD in the eProcurement system and open the price bids of the responsive bidders. iv) The department will notify the successful bidder for submission of original hardcopies of all the uploaded documents DD/BG towards EMD prior to entering into agreement. v) The successful bidder shall invariably furnish the original DD/BG towards EMD, Certificates/Documents of the uploaded scan copies to the Tender Inviting Authority before entering into agreement, either personally or through courier or post and the receipt of the same within the stipulated date shall be the responsibility of the successful bidder. The department will not take any responsibility for any delay in receipt/non-receipt of original DD/BG towards EMD, Certificates/Documents from the successful bidder before the stipulated time. On receipt of documents, the department shall ensure the genuinity of the DD/BG towards EMD and all other certificates/documents uploaded by the bidder in eProcurement system in support of the qualification criteria before concluding the agreement.” The list of documents to be furnished by the bidders, at the end of the tender notice, also makes it clear that the EMD document is mandatory. Clause 1.2 of the ‘Tender Notice and Information to Bidders’ deals with submission of bids and, to the extent relevant, reads as under: “1.2Submission of Bids:- a) The bidders who are desirous of participating in ‘e’ procurement shall submit their Technical bids etc., in the standard formats prescribed in the Tender documents displayed at ‘e’ market place. The bidders should upload the scanned copies of all the relevant certificates, documents etc., in the ‘e’ market place in support of their Technical bids. The bidder shall sign on all the statements, documents, certificates uploaded by him, owning responsibility for their correctness/authenticity. The bidders should upload the scanned copies of all the relevant certificates, documents etc., in the ‘e’ market place in support of their Technical bids. The bidder shall sign on all the statements, documents, certificates uploaded by him, owning responsibility for their correctness/authenticity. b) The successful bidder shall invariably furnish the original DD/BG towards EMD, certificates/documents of the uploaded scanned copies to the Tender Inviting Authority before entering into agreement either personally or through courier or post and the receipt of the same within the stipulated date shall be the responsibility of the successful bidder. The Department will not take any responsibility for any delay in receipt/non-receipt of original DD/BG towards EMD, certificate/documents, from the successful bidder before the stipulated time. c) If any successful bidder fails to submit the original Hard Copies of uploaded certificates/Documents, DD/BG towards EMD within the stipulated time or if any variation is noticed between the uploaded documents and the hard copies submitted by the bidder, the successful bidder will be suspended from participating in the tenders on e-procurement platform for a period of 3 years.” [Emphasis is ours] The above tender conditions are only a reflection of the guidelines prescribed by the Government of Andhra Pradesh in G.O.Ms.No.94, Irrigation and CAD (PW-COD) Department, dated 01.07.2003. Clause 5 in Annexure-I to the said G.O. deals with tender procedures and prescribes the norms for collection of EMD at the time of issuing tender documents: “(5) COLLECTION OF E.M.D. AT THE TIME OF ISSUING TENDER DOCUMENTS: In order to discourage purchase of tender documents by non-serious bidders, tender documents shall be issued to contractors on payment of Earnest Money Deposit, at 1% of the estimated contract value. Successful bidder will pay balance EMD of 1½% contract value at the time of concluding the agreement.” The qualification criteria to be fulfilled by a bidder, for award of a work costing above Rs.10.00 lakh, are prescribed in Clause 10 to Annexure-I to the G.O. One of the criteria stipulated therein is the submission of EMD in the prescribed format at 1% of the estimated contract value. Conspectus of the above conditions and guidelines manifests that collection of EMD at the initial stage of the tender is to weed out frivolous bidders and the intention of the Government is to treat this parameter as an essential requirement. Conspectus of the above conditions and guidelines manifests that collection of EMD at the initial stage of the tender is to weed out frivolous bidders and the intention of the Government is to treat this parameter as an essential requirement. This is also spelt out in the subject tender notice by indicating that filing of the EMD document is mandatory and that uploading the scanned copy of the demand draft/bank guarantee for the stipulated EMD is a primary requirement to consider the bid responsive. BVSRCL would however contend that it had, in fact, uploaded a demand draft towards the EMD, but by mistake and oversight the same was made out for the lesser sum of Rs.8,70,000/-instead of Rs.8,86,700/-. It also pointed out that this shortfall in the EMD was made good by it on 13.04.2011 itself, that is, prior to the meeting of the Commissionerate of Tenders (COT) on 15.04.2011 for finalizing the tender. It may however be noted that no power is vested in the Government, either in G.O.Ms.No.94 dated 01.07.2003 or in the tender conditions, to relax or waive the mandatory requirement of furnishing the stipulated EMD at the initial stage in the form of a scanned copy thereof. It is no doubt true that the original demand draft/bank guarantee for the EMD would be delivered only before the agreement is executed but Clause 3(ii) of the tender conditions makes it explicitly clear that the bid itself would be considered unresponsive if unaccompanied by a scanned copy of the demand draft/bank guarantee for the requisite EMD. Further, Clause 1.2(c) of the tender conditions postulates that if any variation is noticed between the uploaded copy of the demand draft/bank guarantee towards EMD and the original submitted thereafter by the successful bidder, such bidder would be suspended from participating in tenders for a period of three years. It is thus clear that it would not be open to a tenderer to upload a demand draft/bank guarantee for a sum lesser than the stipulated EMD and thereafter make good the lapse by producing a hard copy for the requisite amount. Ergo, it makes no difference whether BVSRCL made good the deficit in the EMD before the meeting of the COT. Having uploaded the demand draft for a lesser sum, BVSRCL was bound by the same. Ergo, it makes no difference whether BVSRCL made good the deficit in the EMD before the meeting of the COT. Having uploaded the demand draft for a lesser sum, BVSRCL was bound by the same. The Government had no power to overlook this lapse and allow BVSRCL to rectify its mistake at a later date. Reference in this regard may also be made to WESTBENGAL STATEELECTRICITY BOARD v. PATEL ENGG. CO. LTD. (2001) 2 SCC 451 , wherein the Supreme Court was dealing with a mistake made by the tenderer while submitting its bid. In this context, the Supreme Court observed: “24.……… It is essential to maintain the sanctity and integrity of process of tender/bid and also award of a contract. The appellant, Respondents 1 to 4 and Respondents 10 and 11 are all bound by the ITB which should be complied with scrupulously. In a work of this nature and magnitude where bidders who fulfill prequalification alone are invited to bid, adherence to the instructions cannot be given a go-by by branding it as a pedantic approach, otherwise it will encourage and provide scope for discrimination, arbitrariness and favouritism which are totally opposed to the rule of law and our constitutional values. The very purpose of issuing rules/instructions is to ensure their enforcement lest the rule of law should be a casualty. Relaxation or waiver of a rule or condition, unless so provided under the ITB, by the State or its agencies (the appellant) in favour of one bidder would create justifiable doubts in the minds of other bidders, would impair the rule of transparency and fairness and provide room for manipulation to suit the whims of the State agencies in picking and choosing a bidder for awarding contracts as in the case of distributing bounty or charity. In our view such approach should always be avoided. Where power to relax or waive a rule or a condition exists under the rules, it has to be done strictly in compliance with the rules. ………” Viewed thus, we have no hesitation in holding that the learned Judge was absolutely correct in coming to the conclusion that the terms and conditions of the subject tender made it a mandatory requirement that the bidder should submit the EMD in the prescribed format for the requisite amount. ………” Viewed thus, we have no hesitation in holding that the learned Judge was absolutely correct in coming to the conclusion that the terms and conditions of the subject tender made it a mandatory requirement that the bidder should submit the EMD in the prescribed format for the requisite amount. Further, the tender conditions did not grant any power of relaxation in this regard to the Government. Once BVSRCL failed to upload a demand draft for the requisite EMD as per the tender conditions, its bid ought to have been held ineligible. That being said, the next question would be whether the learned Judge was justified in holding that the case on hand did not warrant exercise of the discretionary jurisdiction vested in this Court by Article 226 of the Constitution. The learned held so owing to the delay and laches on the part of PLRPL in raising an objection to the eligibility of BVSRCL and in the light of larger public interest. Having given due thought and consideration to this aspect, we are of the opinion that the progression of events relating to the award of the subject contract supports the conclusion of the learned Judge. The pre-qualification/technical bids of the two tenderers, received in response to the subject tender notice dated 01.10.2010, were opened on 27.10.2010. Both PLRPL and BVSRCL were represented at the time of opening of their technical bids on the said date, but PLRPL raised no objection. The categorical statement to this effect made by the Superintending Engineer, Irrigation Circle, Chittoor, in his counter affidavit in Writ Appeal No.1329 of 2011, remained uncontested. Thereafter, the price bids of both the tenderers were opened on 29.01.2011, again in the presence of their representatives. Yet again, there was no protest from PLRPL as to the ineligibility of BVSRCL’s bid. No doubt, the COT in its meeting held on 15.04.2011 took note of the deficiency in the EMD demand draft uploaded by BVSRCL and returned the tenders to the Chief Engineer, Minor Irrigation Department, for necessary further action. Yet again, there was no protest from PLRPL as to the ineligibility of BVSRCL’s bid. No doubt, the COT in its meeting held on 15.04.2011 took note of the deficiency in the EMD demand draft uploaded by BVSRCL and returned the tenders to the Chief Engineer, Minor Irrigation Department, for necessary further action. However, the Minutes of the subsequent meeting of the COT on 19.07.2011 reflect that the Chief Engineer, Minor Irrigation, under his letter dated 25.06.2011, recommended that the bid of BVSRCL should be accepted as it was (-) 3.00% less than the estimated contract value and sought approval of the COT to award the contract to BVSRCL as it would result in a saving of Rs.69,69,269/-when compared to the price quoted by PLRPL. He also pointed out that the work relating to supply of drinking water to Palamaner Town was of a very urgent nature and that the new ‘Standard Schedule of Rates’ (SSR) effective from June, 2011 would increase the cost of the project in addition to requiring fresh tenders being called for once again. Thereupon the COT, taking all these factors into account, decided that it would not be prudent to reject the tender of BVSRCL just because its EMD fell short by a few thousands, which deficit had also been made up by it. It accordingly approved and recommended the acceptance of BVSRCL’s tender subject to certain observations. It is the claim of PLRPL, as reflected in the additional affidavit of its Managing Director, that it came to know about the ineligibility of BVSRCL only on 19.04.2011 and pursuant thereto, it immediately submitted a representation on the same day to the authorities expressing willingness to execute the work at the rate quoted by BVSRCL. This offer was however not considered by the COT, perhaps because the tender conditions and the guidelines prohibit negotiations at any level. Concatenating the events aforestated, it is manifest that PLRPL remained mute and unmoved on 27.10.2010 and 29.01.2011 when the technical and price bids were opened and did not raise the issue of BVSRCL’s ineligibility. It is not clear as to why and in what circumstances PLRPL came by the knowledge of BVSRCL’s ineligibility on 19.04.2011. The price bid having been opened on 29.01.2011 there was no occasion for PLRPL, which was ousted from consideration, to follow up with the authorities after a lapse of more than 2 months. It is not clear as to why and in what circumstances PLRPL came by the knowledge of BVSRCL’s ineligibility on 19.04.2011. The price bid having been opened on 29.01.2011 there was no occasion for PLRPL, which was ousted from consideration, to follow up with the authorities after a lapse of more than 2 months. Be that as it may, the failure on the part of PLRPL to raise an objection at the relevant and earliest point of time, viz., when the technical bids were opened, must inevitably weigh against it. It is not in dispute that BVSRCL, having entered upon the contract work, has already executed 15% of the same and this contract results in savings of nearly Rs.70,00,000/-to the exchequer. Given the demonstrable tardiness of PLRPL in raising the issue; the urgent nature of the work involved and the fact that the disqualification incurred by BVSRCL is not concerned with its technical competence to execute the work, we are inclined to agree with the learned Judge that this was not a fit case for grant of relief under Article 226 of the Constitution. As pointed out by the Supreme Court in G.J.FERNANDEZ v. STATE OF KARNATAKA (1990) 2 SCC 488 , this Court would not interfere in the case of every deviation in the tender process. It is only if such deviation results in arbitrariness or discrimination or where non-conformity with or relaxation from the prescribed standards results in substantial prejudice or injustice to any of the parties involved or to public interest in general that the Court would step in. This Court while exercising its extraordinary jurisdiction under Article 226 of the Constitution may not strike down an illegal order although it would be lawful to do so and may refuse to extend the benefit of discretionary relief to the applicant [CHANDRA SINGH v. STATE OF RAJASTHAN (2003) 6 SCC 545 ]. Elaborating on this principle further, the Supreme Court in RITESH TEWARI v. STATE OF U.P. (2010) 10 SCC 677 held: “26.The power under Article 226 of the Constitution is discretionary and supervisory in nature. It is not issued merely because it is lawful to do so. The extraordinary power in the writ jurisdiction does not exist to set right mere errors of law which do not occasion any substantial injustice. It is not issued merely because it is lawful to do so. The extraordinary power in the writ jurisdiction does not exist to set right mere errors of law which do not occasion any substantial injustice. A writ can be issued only in case of a grave miscarriage of justice or where there has been a flagrant violation of law. The writ court has not only to protect a person from being subjected to a violation of law but also to advance justice and not to thwart it. The Constitution does not place any fetter on the power of the extraordinary jurisdiction but leaves it to the discretion of the court. However, being that the power is discretionary; the court has to balance competing interests, keeping in mind that the interests of justice and public interest coalesce generally. A court of equity, when exercising its equitable jurisdiction must act so as to prevent perpetration of a legal fraud and promote good faith and equity. An order in equity is one which is equitable to all the parties concerned. The petition can be entertained only after being fully satisfied about the factual statements and not in a casual and cavalier manner. ………” We cannot therefore ignore the damage and detriment that would be caused to the State and the larger public interest by our intervention at this stage. We had no doubt stayed further execution of the subject contract at the time of admission of Writ Appeal No.1329 of 2011 on 28.12.2011. We however made it clear in the said order that the views expressed therein were only for the purpose of deciding the stay application and that they were not intended nor should they influence the final decision of the writ appeal or the proposed writ appeal of BVSRCL. Having considered the matter at length and in depth, we are now persuaded to concur with the opinion of the learned Judge as to the eligibility of PLRPL, or rather the lack of it, to seek relief in these proceedings. PLRPL demonstrably slept over the matter from October, 2010 upto April, 2011, be it due to ignorance or deliberately, and cannot therefore be granted relief at this late stage overlooking the larger public interest. We therefore hold that the learned Judge was fully justified in denying relief to PLRPL despite a positive finding on the ineligibility of BVSRCL’s bid. PLRPL demonstrably slept over the matter from October, 2010 upto April, 2011, be it due to ignorance or deliberately, and cannot therefore be granted relief at this late stage overlooking the larger public interest. We therefore hold that the learned Judge was fully justified in denying relief to PLRPL despite a positive finding on the ineligibility of BVSRCL’s bid. In the result, we find that the order of the learned Judge does not brook interference on any ground. Both the Writ Appeals are devoid of merit and are accordingly dismissed. In consequence, the interim order granted by this Court on 28.12.2011 in WAMP No.2801 of 2011 in W.A.No.1329 of 2011 shall stand vacated. Miscellaneous applications, if any, shall also stand disposed of. Parties shall bear their own costs.