JUDGMENT Hon’ble Sudhanshu Dhulia, J. (Oral) 1. Heard Mr. Manoj Tiwari, Senior Advocate assisted by Mr. Pulak Raj Mullick, learned counsel for the petitioner, Mr. Paresh Tripathi, Additional C.S.C. for the State of Utarakhand, Mr. Ravi Babulkar, learned counsel for respondent No. 4 and perused the record. 2. The petitioner before this Court is a construction company. By means of this writ petition the petitioner has challenged the contract awarded in favour of respondent No. 4 – M/s Zenders Engineers Ltd. by the State Government. The construction work of which has been awarded to respondent No. 4 for the construction of four-lane Flyover on NH-72 at ISBT junction in District Dehradun. 3. The Superintending Engineer, Dehradun had invited e-tenders on 12.04.2013 asking eligible bidders for the above construction work and submit the same through e-mail by 25.04.2013. It was a two bid system, meaning thereby that bidders first had to qualify the “technical bid” and after establishing their responsiveness on the technical aspect, such bidders who fulfilled the eligibility criteria were then eligible for the next round i.e. for the “financial bid” where the lowest bidder would get the contract. 4. One of the essential conditions in Clause No. 3.5 (d) of the Bidding Document is with the heading “Eligibility Criteria” which reads as under:- “3.5 (d) The bidder should have satisfactorily completed not less than 50% of the contract value as a prime single contract at least one similar work (Flyover/R.O.B. only) of value not less than Rs. 24.45 Crores (Rs. Twenty Four Crore Forty Five Lac only) in any one year of the last five year.” 5. Another Clause No. 4.4A(b) of the Bidding Document, which is also one of the important clauses to resolve the dispute in the present case, which reads as under:- “4.4A(b) The bidders should have satisfactorily completed (not less than 50% of the contract value) as a prime single contractor at least one similar works (flyover/ROB only) of value not less than Rs. 24.45 Crores (Rs. Twenty Four Crore Forty Five Lac Only) in the last five years ending last day of the month previous to the one in which the tenders are invited (i.e. 31-03-2013). Only the contracts registered during the above period shall be considered. Requisite time of completion of the contract Bond and the actual time of completion of the work should also be indicated separately. Only the contracts registered during the above period shall be considered. Requisite time of completion of the contract Bond and the actual time of completion of the work should also be indicated separately. The details of payments received for such contract shall be submitted year wise based on Form-16A issued by the employer i.e. the certificate of deduction of tax at source under Section 203 of Income Tax Act 1961. The photocopies of Form-16A shall be enclosed duly attested by Notary Public with seal and Notarial Stamp thereon.” 6. The counsel for the petitioner has argued that one of the essential conditions for a person to become a responsive bidder was that he must have completed not less than 50% of the contract value as a prime single contractor for at least one Flyover or Railway Over Bridge (ROB) of value not less than ‘24.45 crores in any one year of the last five years. Since this is the main crux of the argument that respondent No. 4 did not fulfill this mandatory eligibility criteria, it is argued that his bid was liable to be declared as non-responsive. We will elaborate on this aspect in a while. 7. Four Companies in all made their bids. These are as follows:- (i) M/s Zenders Engineers Ltd. (ii) M/s Deepak Builders (iii) M/s S.P. Singla Construction Pvt. Ltd. (iv) M/s N.K.G. Infrastructure Ltd. 8. The technical bids were opened in the presence of all the above four bidders. Once a technical bid of all these four bidders were opened by the technical committee, it was found that each of the bidders was lacking at least one of the criterias. 9. For example, the petitioner himself, according to the technical committee, had not completed a work of ‘24.45 crores or even less than 50% of the contract value in one single year as a prime single contractor, but yet they made the petitioner “substantially responsive”. Meaning thereby that the petitioner become eligible by way of the relaxation made by the respondent/employer in making him a substantially responsive bidder. Similarly, respondent No. 4 had not completed a project of ‘24.45 crores or even 50% of the contract value as a “prime single contractor”. Meaning thereby that the petitioner become eligible by way of the relaxation made by the respondent/employer in making him a substantially responsive bidder. Similarly, respondent No. 4 had not completed a project of ‘24.45 crores or even 50% of the contract value as a “prime single contractor”. Yet respondent No. 4 was made “substantially responsive” by the technical committee on the ground that though he has not done the work as a prime single contractor yet he has done work of the same value as a “sub-contractor” in twelve months and he is also registered with the Government of Punjab! 10. The technical bids were opened on 25.04.2013 and the financial bids were opened on 02.05.2013 and respondent No. 4, being the lowest bidder succeeded in getting the contract. Meanwhile, the petitioner raised an objection on 10.05.2013 before the concerned authority stating therein that respondent No. 4, in fact, is not a “responsive bidder” as he has not fulfilled a primary condition as he has not done any single work as a “prime contractor” of the value of ‘24.45 crores or done even 50% of the contract value in the single year as required under the condition of the Bidding Document, as a “prime contractor”. Since nothing happened to this objection, the petitioner has filed the present writ petition before this Court wherein he has prayed that tender of respondent No. 4 be rejected and the contract be given in his favour as he only meets the eligibility criteria as a responsive bidder. 11. Mr. Tripathi, Additional C.S.C. for the State while defending the contract given in favour of respondent No. 4 has relied upon two conditions in the Bidding Document. These are contained in Clause Nos. 26.1 and 26.2 of the Bidding Document, which read hereunder:- “26.1. Prior to detailed evaluation of Bids, the Employer will determine whether each Bids. (a) Meets the eligibility criteria defined in Clause 3 and has been properly signed by an authorized signatory (accredited representative) holding Power of Attorney in his favour. The Power of Attorney shall interalia include a provision to bind the Bidder to settlement of disputes clauses. (b) is accompanied by the required securities and. (c) is substantially responsive to the requirement of the Bidding documents. 26.2 A responsive Bid is one which conforms to all the terms, conditions and specifications of the Bidding documents without material deviation or reservation. (b) is accompanied by the required securities and. (c) is substantially responsive to the requirement of the Bidding documents. 26.2 A responsive Bid is one which conforms to all the terms, conditions and specifications of the Bidding documents without material deviation or reservation. A material deviation or reservation is one. (a) which affects in any substantial way the scope quality or performance of the Work; (b) which limits in any substantial way the Employer’s rights or the Bidder’s obligations under the contractor. (c) whose rectification would effect unfairly the competitive position of together Bidders presenting substantially responsive Bids.” 12. He further relied on Clause No. 29.3 of the Bid Document, which reads as under:- “29.3 The Employer reserves the right to accept or reject any variation or deviation. Variations and deviations and other factors, which are in excess of the requirements of the Bidding documents or otherwise result in unsolicited benefits for the Employee, shall not be taken into account in Bid evaluation.” 13. The argument of the State counsel would be that all the four bidders had one or two shortcomings, but since all of them were “substantially responsive”, they were made so, more particularly, in view of the powers of the employers contained in Clause No. 29.3 of the Bidding Document, which gives the employer a right to accept or reject or do any variation or deviation in the bid. 14. As far as the argument of the respondents regarding substantial responsiveness is concerned, the Court is in agreement with the same, which would be that even if a company has some minor shortcoming and it does not completely meet the criteria, but does so very nearly or almost, then under Clause 26 and Clause 29.3 such powers vest with the employer to grant relaxation. But nevertheless the respondent i.e. employer does not have powers to completely shut it eyes to the essential conditions! 15. Admittedly, respondent No. 4 has not worked as a “prime single contractor”. Whatever value of work he has executed is only in the capacity of a sub-contractor. But nevertheless the respondent i.e. employer does not have powers to completely shut it eyes to the essential conditions! 15. Admittedly, respondent No. 4 has not worked as a “prime single contractor”. Whatever value of work he has executed is only in the capacity of a sub-contractor. As far as power under Clause 29.3 of the Bidding Document is concerned, it does not give blanket powers to the employer to vary or deviate the essential conditions as the purpose of Clause 29.3 of the Bidding Document is not to place any variation or deviation, which are in excess of the requirement of the Bidding Document and which may give a unsolicited benefits to a employer. In fact, just the reverse has happened. What has happened in this present case is that the employer has made respondent No. 4 technically qualified though as per the bidding condition contained in the Bidding Document, he was not technically qualified. Therefore, the act of the respondent/employer in making the bid in favour of respondent No. 4, a technical responsive bid, is totally arbitrary as well as against the public policy. It is in any case in violation of the conditions contained in the Bidding Document. 16. Mr. Babulkar, learned counsel for respondent No. 4 then drew the attention of this Court towards annexure No. 3 of his counter affidavit wherein while evaluating the technical bid of all the four bidders, the technical committee making the bid of respondent No. 4 responsive. It has stated as follows:- “Sidhwan Canal Flyover, Underpass, ROB in Doraha to Ludhiyana Firojpur Road Rs. 25.26 Cr. (Work performed as sub-contractor of M/s HG CL – Neeraj Supreme Infrastructure which is approved by Executive Engineer, CD-4, BR Branch, PWD, Ludhiana). Since the sub-contractor is approved by Govt. Department and the work is completed in 12 months. At present in MoRT&H* and ADB** documents it is treated as eqalent to Prime Contractor. It can be treated as responsive on this ground. Looking into experience of work.” 17. Since the sub-contractor is approved by Govt. Department and the work is completed in 12 months. At present in MoRT&H* and ADB** documents it is treated as eqalent to Prime Contractor. It can be treated as responsive on this ground. Looking into experience of work.” 17. In other words, the technical committee has made the bid of respondent No. 4 as a responsive bid, although, the work done by respondent No. 4 at Ludhiana, Firojpur Road in Punjab was as a sub-contractor, but since as a sub-contractor it was approved by the Government Department and such a person can be treated to be a prime contractor, therefore, he was treated to be a prime single contractor. Under what law, logic or reasoning this has been done, this Court has been totally at pains to comprehend. The “conditions” certainly do not give such powers to the committee. 18. Learned counsel for respondent No. 4 as well as learned Additional C.S.C. for the State has not shown any condition in the bid document by which a sub-contractor can be treated as a prime single contractor. On the other hand, learned counsel for the petitioner has drawn the attention of the Court to the condition contained in Clause No. 4.5 of the Bidding Document, which reads as under:- “4.5 Sub contractor’s Experience and resources shall not be taken into account in determining the bidder compliance with qualifying criteria.” 19. In other words the experience of respondent No. 4 as a sub-contractor was not liable to be treated as “qualifying criteria”, of a “prime contractor”. This is a specific condition of the Bidding Document. 20. Learned counsel for the petitioner also pointed out this Court to Clause 31.1, which reads as under:- “31.1 The Employer will award the Contract to the Bidder whose Bid has been determined to be responsive to the Bidding documents and who has offered the lowest evaluated Bid price, provide that such Bidder has been determined to be eligible in accordance with the provisions of Clause 3 and (b) qualified accordance with the provisions of Clause 4.” 21. In other words the aforesaid provision means that the contract should be awarded to the person who has given the lowest bid provided he is technically qualified and one of the essential qualification in the technical bid should have satisfactorily completed not less than 50% of the contract value as a prime single contract at least one similar work (Flyover/R.O.B. only) of value not less than Rs. 24.45 Crores as a prime single contractor. Respondent No. 4 has not done so. 22. Learned counsel for the petitioner has further argued that since they had completed their work in the last five years, therefore, they were in any case responsive bidder and no condition in their case has already been relaxed. 23. Mr. Paresh Tripathi, learned Additional C.S.C. for the respondent/State has relied upon a decision of Hon’ble Apex Court in B.S.N. Joshi & Sons Ltd. Vs Nair Coal Services Ltd. & others reported in (2006) 11 Supreme Court Cases 548, in which in paragraph 66 the Hon’ble Apex Court has drawn of certain principles to be kept in mind when a judicial review of a contract is to be made. Paragraph No. 66 of the same reads as under:- “66. Paragraph No. 66 of the same reads as under:- “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 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 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.” 24. 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.” 24. Undoubtedly whether the bid of respondent No. 4 has been rightly accepted would be determined on the basis of the above principles laid down by the Hon’ble Apex Court, and based on the above principles, this Court is of the considered view that the technical committee or the employer has relaxed the essential condition of a “Prime Single Contractor” in favour of respondent No. 4 and has held him to be a eligible in technical bid, which is completely wrong. Hence apparently only one conclusion can be drawn out of it, which is that it has been done only as a ‘favour’ to respondent No. 4. Moreover, under no stretch of imagination can it be said that the bid which has been finally given by relaxing these fundamental condition in favour of respondent No. 4 is in public interest. Therefore, interference of this Court is absolutely necessary under the present circumstances. 25. Learned counsel for the respondent/State has further relied upon a decision of Hon’ble Apex Court in Jagdish Mandal Vs State of Orissa & others reported in (2007) 14 SCC 517 wherein the Hon’ble Apex Court has observed as under:- “22. Judicial review of administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias and malafides. 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 Page 0102 power of judicial review, interfere even if a procedural aberration or error in assessment or prejudice to a tenderer, is made out. 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 Page 0102 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. 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 black-listing 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. Learned counsel for respondent No. 4 has also relied upon the following judgments of the Hon’ble Apex Court:- 1. M/s Radhakrishna Agarwal and others Vs State of Bihar & others reported in AIR 1977 SC 1496 . 2. Air India Vs Cochin Ltd. International Airport Ltd. & others reported in AIR 2000 SC 801 . 27. Learned counsel for respondent No. 4 has also relied upon the following judgments of the Hon’ble Apex Court:- 1. M/s Radhakrishna Agarwal and others Vs State of Bihar & others reported in AIR 1977 SC 1496 . 2. Air India Vs Cochin Ltd. International Airport Ltd. & others reported in AIR 2000 SC 801 . 27. After going through the entire records as well as the decisions of Hon’ble Apex Court placed by the counsel for the parties, this Court is of the considered view that the contract which has been awarded to respondent No. 4 was done purely in order to favour respondent No. 4 and that it is violative of public interest. 28. In view of the forgoing discussion, since technically all the bidders, including the petitioner as well as respondent No. 4, did not meet the criteria and in each of their cases, one of the conditions was relaxed, though the writ petition succeeds, but it only succeeds in part. 29. The contract given in favour of respondent No. 4 is treated to be invalid and is hereby declared to be rejected. Respondent No. 4 shall cease from doing any work of the contract forthwith, which was given to him by the employer and handover the site to the employer immediately. Thereafter, the employer i.e. State of Uttarakhand shall re-advertise the tender and initiate fresh proceedings for awarding the same in favour of a eligible contractor, in accordance with law, as expeditiously as possible.