JUDGMENT Dev Darshan Sud, J. This writ petition has been filed by the petitioner seeking an appropriate writ directing the respondents to produce the records of the case, (b) that the respondents be directed to consider the bid of the petitioner herein for the work of Jawahar Lal Nehru Government Engineering College at Sunder Nagar. 2. Before I proceed with the case further, what I notice is that the case has been hanging fire since 2nd February, 2012. By an order passed on that date, a direction was issued to the respondents to consider the petitioner’s bid while finalizing the tenders which were made specifically subject to the final decision of the writ petition. The facts of this case need not detain this Court any further since it is an admitted case that the petitioner is a registered Class-A contractor. The conditions imposed are: “One work of atleast 4.00 Crores. Reference to conditions of contract Refer to condition No.1 2(v) Engineer-in-Charge Executive Engineer. 2(viii) Accepting authority Executive Engineer. (2x) Percentage of material & labour………….. To cover all overheads and profit (2xi) Standard Schedule of Rates HPSR 2009 2(xii) Department HPPWD. 9(ii) Standard HPWD contract form HPPWD form No.7/8 as Modified & corrected up to……………… Reference to Clauses of contract: Clause 2: Authority for fixing compensation Superintending Engineer. Clause 5: No of days from the date of 15th days of letter acceptance for reckoning Date of star. Sr.No. Financial Time Allowed Amount to be Progress in days (from date of start) with held in case of non achievement of milestone. Refer Clause No. 10A List of Equipment to be provided by contractor at site 1. Sieve Set…..(As per IRC SP-20-2002 2. Electronics Balance (200 gms and 5 kg). 3. Concrete mould 150x150 4 Mortar moulds 50x50 Refer clause No.10B (ii) Whether clause No.10(ii) applicable :No. Refer clause No.11 1. 1/8th (of whole work) 1/4th (of whole work) In the event of not achievement the necessary progress as assessed from the running payments, 1% of the tender value of work will be with held for failure of each mile stone. 2. 3/8th (of whole work 1/2th (of whole work) -do 3. 3/4th (of whole work) 3/4th (of whole work) -do 4. Full Full -do Specifications to be followed for execution of work For Building work :HPWD specification for buildings 1990 For Road work(Rural) Ministry of Rural department Govt. 2. 3/8th (of whole work 1/2th (of whole work) -do 3. 3/4th (of whole work) 3/4th (of whole work) -do 4. Full Full -do Specifications to be followed for execution of work For Building work :HPWD specification for buildings 1990 For Road work(Rural) Ministry of Rural department Govt. of India specifications for rural roads May,2007. For Road work (NH or : Ministry of Road Transport & Highway CRF Roads) Govt. of India Specifications. Refer to Clause No.12 Deviation limit for which 12 A shall for work : 30% Refer to Clause No.16 Competent authority for deciding reduced rates i.e. Superintending Engineer. Refer Clause No.18 List of mandatory machinery, tools &plants to by deployed by contractor at site Refer Clause 18 B Fair wages shall be applicable as notified by the H.P. Govt. and applicable on the date of opening of the tender. The rates of daily wages in respect of various categories of daily wages engaged in various Department in H.P. are revised as shown in Annexure:1. The per hour rate of part-time workers is also revised from Rs.10.00 per hour to Rs.13.00 per hour w.e.f. Ist January, 2008. All those engaged on daily wages basis/part-time basis in the Scheduled Tribal Areas of the State shall be allowed 25% enhancement on the revised daily wages as per Finance Department’s Office Memorandum No. FIN(PR)B(7)-1/95-II dated 17.4.1998………………..” 3. It is this condition which has been challenged by Sr.No. Description of Machinery T&P No. required at Site. 1. Excavator cum loader 4 2. Tipper/Truck 4 3. Concrete Mixer 3 the petitioner as being arbitrary on the ground that: (a) it has been inserted for the sole purpose of excluding the petitioner (b) that since the petitioner is a registered class-A contractor, he is entitled to participate in the tender process for any contract/work to be awarded by the government without any monetary ceiling. The rival contentions of the parties on this point have been considered. The case of the petitioner is based on Annexure:P2 where the condition imposed: “With reference to his application dated 05.02.02, Sh. Narain Dass, Contractor, S/o Sh. Sadhu Ram, village Bhour, P.O.Kanaid, Tehsil Sundernagar, Distt. Mandi (Himachal Pradesh, is hereby upgraded from Class-B to Class-A Contractor for B&R works in this department. The Contractor shall be eligible to submit tender without any limit in the Public Works Department (B&R) in whole of Himachal Pradesh. Narain Dass, Contractor, S/o Sh. Sadhu Ram, village Bhour, P.O.Kanaid, Tehsil Sundernagar, Distt. Mandi (Himachal Pradesh, is hereby upgraded from Class-B to Class-A Contractor for B&R works in this department. The Contractor shall be eligible to submit tender without any limit in the Public Works Department (B&R) in whole of Himachal Pradesh. His enlistment in this Class is (CE(CZ)A-02(14)”. 4. This enlistment was validated only up to 31.3.2004. This is now validated up to 31st March, 2013 as is evident from the order of the Public Works Department No. PW-CE(MZ) CTR-Renewal-A/10-3752-800 dated 26.5.2010. This is the only controversy which has been raised in this case. 5. The award of Government contracts is no more res integra and has been considered by the Supreme Court in number of decisions. In Raunaq International Ltd. Vs. I.V.R. Construction Ltd. and others, (1999) 1 SCC 492 , while considering the entire gamut of the law, the Supreme Court, inter alia, holds: 9. 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 of paramount importance are commercial considerations. These would be :(1) The price at which the other side is willing to do the work; (2) Whether the goods or services offered are of the requisite specifications; (3) Whether the person tendering has the ability to deliver the goods or services as per specifications. When large works contracts involving engagement of substantial manpower or requiring specific skills are to be offered, the financial ability of the tenderer to fulfil the requirements of the job is also important; (4) the ability of the tenderer to deliver goods or services or to do the work of the requisite standard and quality; (5) past experience of the tenderer, and whether he has successfully completed similar work earlier; (6) time which will be taken to deliver the goods or services; and often (7) the ability of the tenderer to take follow up action, rectify defects or to give post contract services. Even when the State or a public body enters into a commercial transaction, considerations which would prevail in its decision to award the contract to a given party would be the same. Even when the State or a public body enters into a commercial transaction, considerations which would prevail in its decision to award the contract to a given party would be the same. However, because the State or a public body or an agency of the State enters into such a contract, there could be, in a given case, an element of public law or public interest involved even in such a commercial transaction. 10. What are these elements of public interest ? (1) Public money would be expended for the purposes of the contract; (2) The goods or services which are being commissioned could be for a public purpose, such as, construction of roads, public buildings, power plants or other public utilities. (3) The public would be directly interested in the timely fulfilment of the contract so that the services become available to the public expeditiously. (4) The public would also be interested in the quality of the work undertaken or goods supplied by the tenderer. Poor quality of work or goods can lead to tremendous public hardship and substantial financial outlay either in correcting mistakes or in rectifying defects or even at times in re-doing the entire work -thus involving larger outlays or public money and delaying the availability of services, facilities or goods. e.g. A delay in commissioning a power project, as in the present case, could lead to power shortages, retardation of industrial development, hardship to the general public and substantial cost escalation. 11. When a writ petition is filed in the High court challenging the award of a contract by a public authority or the State, the court must be satisfied that there is some element of public interest involved in entertaining such a petition. If, for example, the dispute is purely between two tenderers, the court must be very careful to see if there is any element of public interest involved in the litigation. A mere difference in the prices offered by the two tenderers may or may not be decisive in deciding whether any public interest is involved in intervening in such a commercial transaction. It is important to bear in mind that by court intervention, the proposed project may be considerably delayed thus escalating the cost far more than any saving which the court Would ultimately effect in public money by deciding the dispute in favour of one tenderer or the other tenderer. It is important to bear in mind that by court intervention, the proposed project may be considerably delayed thus escalating the cost far more than any saving which the court Would ultimately effect in public money by deciding the dispute in favour of one tenderer or the other tenderer. Therefore, unless the court is satisfied that there is a substantial amount of public interest, or the transaction is entered into mala fide. the court should not intervene under Article 226 in disputes between two rival tenderers…………. 21. It is unfortunate that despite repeated observations of this court in a number of cases, such petitions are being readily entertained by the High Courts without weighing the consequences. In the case of Fertiliser Corporation Kamgar Union (Regd.), Sindri and Ors. v. Union of India and Ors, [1981] 1 SCC 568, this court observed that if the Government acts fairly, though falters in wisdom, the court should not interfere……..”. (Pp.500,501&503) 6. This decision has been subsequently re-affirmed by the Supreme Court in Air India Ltd. Vs. Cochin International Airport Ltd. and others, (2000) 2 SCC 617 . In Meerut Development Authority Vs. Association of Management Studies and another, (2009) 6 SCC 171 , the principles governing award of contract on evaluation of tenders has been reiterated by the Supreme Court. Again, after considering the entire case law, the Court holds: “33……………Once it is clear that there was no vagueness, uncertainty or any confusion with regard to the reserved price there is no scope for any interference in the matter by this court. The terms and conditions of tender were expressly clear by which the authority as well as the bidders were bound and such conditions are not open to judicial scrutiny unless the action of the tendering authority is found to be malicious and misuse of its statutory powers.[See: Tata Cellular vs. UOI1, Air India Ltd. vs. Cochin International Airport Ltd.2, Directorate of Education vs. Educomp Datamatic Ltd.3, Association of Registration Plates vs. UOI , Global Energy Ltd. vs. Adani Exports5, and Purvanchal Projects Ltd. vs. Hotel Venues 6.] (P. 183) 7. Adverting to the power of the Court for judicial review in contractual matters, the Court reaffirmed the decision in Tata Cellular Vs. Union of India, (1994) 6 SCC 651 laying down the limits and parameters for exercise of this power. 8. In Himachal Pradesh Housing and Urban Development Authority Vs. Adverting to the power of the Court for judicial review in contractual matters, the Court reaffirmed the decision in Tata Cellular Vs. Union of India, (1994) 6 SCC 651 laying down the limits and parameters for exercise of this power. 8. In Himachal Pradesh Housing and Urban Development Authority Vs. Universal Estate and another, (2010) 14 SCC 253 , the court reaffirming the entire precedent holds: “23. In Air India Ltd. v. Cochin International Airport Ltd. (2000) 2 SCC 617 , the Court while dealing with a matter involving award of contract, made it clear that the public authority is free not to accept the highest or the lowest offer and the scope of judicial review is confined to the scrutiny of decision making process, which can be annulled if the same is found to be vitiated by malafides, arbitrariness or total unreasonableness. Some of the observations made in the judgment are extracted below: "7……….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 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, 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 found vitiated by mala fides, unreasonableness and arbitrariness. The State, its corporations, instrumentalities and agencies have the public duty to be fair to all concerned. 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, its 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. 24. In Jagdish Mandal v. State of Orissa (2007) 14 SCC 517, a two-Judge Bench, after taking note of the propositions laid down in Sterling Computers Ltd. v. M & N Publications Ltd. (1993) 1 SCC 445 , Tata Cellular v. Union of India (1994) 6 SCC 651 , Air India Ltd. v. Cochin International Airport Ltd. (supra) and B.S.N. Joshi & Sons Ltd. v. Nair Coal Services Ltd. (2006) 11 SCC 548 observed: "22. Judicial review of administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias and mala fides. Its purpose is to check whether choice or decision is made "lawfully" and not to check whether choice or decision is "sound". When the power of judicial review is invoked in matters relating to tenders or award of contracts, certain special features should be borne in mind. A contract is a commercial transaction. Evaluating tenders and awarding contracts are essentially commercial functions. Principles of equity and natural justice stay at a distance. If the decision relating to award of contract is bona fide and is in public interest, courts will not, in exercise of power of judicial review, interfere even if a procedural aberration or error in assessment or prejudice to a tenderer, is made out. The power of judicial review will not be permitted to be invoked to protect private interest at the cost of public interest, or to decide contractual disputes. The tenderer or contractor with a grievance can always seek damages in a civil court. The power of judicial review will not be permitted to be invoked to protect private interest at the cost of public interest, or to decide contractual disputes. The tenderer or contractor with a grievance can always seek damages in a civil court. Attempts by unsuccessful tenderers with imaginary grievances, wounded pride and business rivalry, to make mountains out of molehills of some technical/procedural violation or some prejudice to self, and persuade courts to interfere by exercising power of judicial review, should be resisted. Such interferences, either interim or final, may hold up public works for years, or delay relief and succour to thousands and millions and may increase the project cost manifold. Therefore, a court before interfering in tender or contractual matters in exercise of power of judicial review, should pose to itself the following questions: (i) Whether the process adopted or decision made by the authority is mala fide or intended to favour someone; OR Whether the process adopted or decision made is so arbitrary and irrational that the court can say: "the decision is such that no responsible authority acting reasonably and in accordance with relevant law could have reached"; (ii) Whether public interest is affected. If the answers are in the negative, there should be no interference under Article 226. Cases involving blacklisting or imposition of penal consequences on a tenderer/contractor or distribution of State largesse (allotment of sites/shops, grant of licences, dealerships and franchises) stand on a different footing as they may require a higher degree of fairness in action…………………… 26.This Court in Meerut Development Authority Vs. Assn. of Management Studies, (2009) 6 SCC 171 allowed the appeal and reversed the order of the High Court insofar as it related to the respondent and observed that the decision taken by the appellant was neither arbitrary nor vitiated due to mala fides and the respondent did not have any right to be allotted land. The Bench relied on the principles laid down in several decisions and reiterated the following observations in Kasturi Lal Lakshmi Reddy v. State of J&K (1980) 4 SCC 1 : "14..... It must follow as a necessary corollary from this proposition that the Government cannot act in a manner which would benefit a private party at the cost of the State; such an action would be both unreasonable and contrary to public interest. It must follow as a necessary corollary from this proposition that the Government cannot act in a manner which would benefit a private party at the cost of the State; such an action would be both unreasonable and contrary to public interest. The Government, therefore, cannot, for example, give a contract or sell or lease out its property for a consideration less than the highest that can be obtained for it, unless of course there are other considerations which render it reasonable and in public interest to do so." (Pp.262,263,264&265) 9. The principles find enunciation in detail in Tata Cellular Vs. Union of India, (1994) 6 SCC 651 , Asia Foundation & Construction Ltd. Vs. Trafalgar House Construction (I) Ltd. and others, (1997) 1 SCC 738 and W.B. State Electricity Board Vs. Patel Engineering Co. Ltd. and others, (2001) 2 SCC 451 , subject to factual distinction. This is the settled law. The question for determination in this writ petition is whether or not the action of the respondents is malafide. 10. Learned Additional Advocate General submits that the conditions which are imposed by the Central Public Works Department (C.P.W.D. for short) are per se applicable to contract/tenders floated by the Government of Himachal Pradesh. I cannot accept this submission as this is a very wide proposition urged. However, despite repeated efforts to obtain the material from the State to show as to how and under what circumstances enlistment is made as Class-A contractor, no material has been placed on the record. But the fact still remains that the petitioner was certified to bid for a contract without any monetary ceiling. It is this circumstance which has been overlooked by the respondents and requires consideration. While exercising powers under Article 226 of the Constitution of India, I am mindful of the constrains placed upon this Court by law. However, judicial review in this case is only confined to this solitary issue whether the condition can or cannot be imposed, whether such a condition is a sine qua non and whether class-A contractors would be exempted from this condition. 11. However, judicial review in this case is only confined to this solitary issue whether the condition can or cannot be imposed, whether such a condition is a sine qua non and whether class-A contractors would be exempted from this condition. 11. In the absence of any material on record repeatedly asked for by the court, this writ petition is allowed with the direction that the respondents shall consider the case of the petitioner as to whether the condition enlisting him as class-A contractor would grant an exemption from the aforesaid condition or not. This direction is issued keeping in view the fact that after a general enlistment of the petitioner herein as Class-A contractor, according to the terms and conditions, no pre condition is placed upon him to justify his further working with the Government. Such decision shall be taken by the respondents within a period of one week from the date when this order is first presented before the Chief Engineer, Central Zone, H.P.PWD, Mandi. He shall dispose of it by way of speaking order. Liberty reserved to the petitioner to approach this court again in accordance with law.