State of Telangana v. Venkateswara Industries, Mahabobnagar
2016-09-26
RAMESH RANGANATHAN, U.DURGA PRASAD RAO
body2016
DigiLaw.ai
Common Judgment: Ramesh Ranganathan, J. 1. This appeal, under Clause 15 of the Letters Patent, is preferred against the order passed by the Learned Single Judge in W.P. No.24599 of 2016 dated 29.07.2016. The learned Government Pleader, appearing on behalf of the Learned Additional Advocate-General, submits that the Writ Petition was allowed even without giving the appellants herein an opportunity of filing a counter-affidavit, and in placing the facts which led to restricting the eligibility, for participation in the tender notice dated 16.07.2016, only to poultry farmers with NECC certification and in eliminating traders, such as the petitioners, from participating in the tender process. This submission of the Learned Government Pleader is well founded. While we were initially inclined to set aside the order under appeal on the ground that the Writ Petition was allowed without the appellants herein (respondents in the Writ Petition) being given an opportunity to file their counter-affidavit, and restore the Writ Petition to file to be heard by the Learned Single Judge, both the Learned Government Pleader and Sri D. Prakash Reddy, Learned Senior Counsel appearing on behalf of the respondent-writ petitioners, would submit that, in view of the urgency in having the dispute adjudicated, we should hear the Writ Petition itself. The order under appeal is accordingly set aside, W.A.No.751 of 2016 is allowed and W.P.No.24599 of 2016 is restored to file, and is being disposed of by this order. The relief sought for in W.P.No.24599 of 2016 is to declare the action of the Project Director, District Women and Child Development Agency, Mahaboobnagar District (2nd respondent), in issuing e-tender notice dated 16.07.2016 inviting tenders, for supply of eggs to Anganwadi centres of 20 Integrated Child Development Scheme (“ICDS”) projects in Mahaboobnagar District, restricting eligibility only to poultry farmers/associations with NECC certification, and eliminating other suppliers/traders like the petitioners from participating in the tender process as illegal, arbitrary, unreasonable, unfair, discriminatory, and and in violation of Articles 14, 19(1)(g), and 21 of the Constitution of India. A consequential direction is sought to the respondents to allow the petitioners to participate in the tender process by supplying, receiving, and considering the tender schedule submitted by the petitioners, after declaring them as eligible on par with the poultry farmers, without insisting on NECC certification. 2.
A consequential direction is sought to the respondents to allow the petitioners to participate in the tender process by supplying, receiving, and considering the tender schedule submitted by the petitioners, after declaring them as eligible on par with the poultry farmers, without insisting on NECC certification. 2. In the affidavit, filed in support of the Writ Petition, it is stated that the tender notification dated 16.07.2016, which restricts eligibility only to poultry farmers/associations with National Egg Coordination Committee (“NECC”) certification, and eliminates other suppliers/traders like the petitioners from participating in the tender process, is arbitrary and violative of Articles 14 and 19(1)(g) of the Constitution of India; the petitioners are engaged in the supply of eggs to various persons/firms, including to government bodies in Mahaboobnagar District, for the last several years; the petitioners have been supplying eggs to the Anganwadi Centres of 20 ICDS projects pursuant to the proceedings dated 15.02.2014; on expiry of the contract period on 31.12.2014, a notification was issued on 07.01.2015 for supply of eggs to the Anganwadi Centres of 20 ICDS projects, while restricting the entry to the poultry farmers with NECC certification alone; the petitioners questioned the same by filing W.P. No.533 of 2015, and obtained an interim order on 21.01.2015, whereby their tenders were directed to be received; by proceedings dated 09.12.2015 work orders, to supply eggs to the Anganwadi centres, were issued to them till the tender process resumed; they have been supplying eggs from January, 2016 onwards; the respondents, with a view to create a ground to prevent them from competing in the tender process, decided to issue a fresh tender notification; the tender notification stipulates registration with the NECC, which is not a statutory body but is a society registered under the Societies Registration Act; NECC has been established to protect the interest of the poultry farmers and regulate the price of eggs so as to prevent any loss to the farmers; the condition imposed in the tender notification, excluding traders such as the petitioners and those who are not members of the NECC, results in discrimination between members of the NECC and those who are not its members; as the State permits business or trade in poultry production, every poultry trader has an equal right to carry on the trade, and the State cannot discriminate between parties qualified to carry on trade; free trade and competition ensures the best quality at the most reasonable prices to the consumers; the action of the respondents is an abuse of power, besides being arbitrary; the petitioners are supplying eggs for the last five years, and eliminating them from the process of selection is unjust and unreasonable; and the petitioner should be allowed to participate in the tender process.
3. In the counter-affidavit filed by the Project Director, District Woman and Child Welfare Department dated 24.08.2016, it is stated that the petitioners have not challenged the validity of G.O.Ms. No.12 dated 26.11.2014, and the consequential memos dated 09.12.2014 and 17.12.2014 issued by the first respondent; they have only challenged the e-tender notice dated 16.07.2016 inviting tenders for supply of eggs to Anganwadi centres of 20 ICDS projects in Mahaboobnagar District; after formation of the new State of Telangana, the Government has changed its policy, and has made it compulsory that eggs shall be procured, through the District Procurement Committees, from NECC registered poultry farmers without third party involvement; the average cost of an egg should not exceed Rs.3.50; each egg should weigh 50 grams, and a specific colour should be used every 10 days in a month; in terms of the present policies of the State of Telangana, the 2nd respondent called for tenders for supply of eggs to ICDS projects; the tender notice clearly indicates that farmers and connected poultry farmers, who have certification with the NECC, alone are eligible to participate in the tender; this tender notice is in accordance with the policy of the State of Telangana enunciated in G.O.Ms. No.12 dated 26.11.2014, and the consequential memos dated 09.12.2014 and 17.12.2014; and pursuant to the tender notice, 43 applications were received.
No.12 dated 26.11.2014, and the consequential memos dated 09.12.2014 and 17.12.2014; and pursuant to the tender notice, 43 applications were received. It is also stated that NECC is an association of poultry farmers in India established in May, 1982, and has a membership of more than 25,000 farmers; in the past two decades, it has played a significant role for the betterment of the poultry industry in general, and the egg industry in particular, through its programmes like market intervention, price support operations, egg promotion campaigns, consumer education, market research, rural market development, and liaison with the government on vital issues concerning the industry; NECC plays a significant role in the Indian egg industry, which mainly focuses on egg pricing; NECC has expanded its scope of activities to achieve a reasonable price for customers, a decent margin for middlemen, and a fair return to the farmers; in pursuit of its objectives and achievements, NECC has decided to monitor, manage and regulate the stock of eggs from surplus to deficit regions; it seeks to promote egg trade, egg farming and egg exports; it makes available the technology and information needed for increased production of eggs; NECC has started declaring egg prices from 14.05.1982; its objectives and achievements go far beyond determining a fair egg price; its objects include organising and uniting poultry farmers across the country, to generate employment by encouraging people to take up egg farming; NECC makes no profits and subsists entirely on voluntary contributions from the members (layer farmers i.e. farmers with hens); and NECC uses a three tier democratic set up organized in the form of 40 committees around the country. 4.
4. According to the respondents, while reviewing the Integrated Child Development Scheme (“ICDS”), the Government found certain deficiencies in its implementation, as a result of which the desired goals of improvement of the nutritional status of women and children in the State has not been fully achieved; the percentage of low birth weight babies, underweight children and pregnant women who are anaemic is still high, leading to a high infant mortality rate and a high maternal mortality rate; it is in this context that the one full meal programme is being implemented; under the operational guidelines, issued in memo dated 09.12.2014, eggs are required to be procured through the District Procurement Committees from NECC registered poultry farmers without third party involvement; this is reiterated in the memo dated 17.12.2014; the action of the respondents does not suffer from the vice of discrimination; the same criteria is followed in all the districts in the State of Telangana; W.P.No.533 of 2015 was disposed of in March, 2016 itself; and the present Writ Petition is devoid of merits. 5. In the reply affidavit filed thereto, the petitioners state that the Joint Collector, Mahaboobnagar issued proceedings dated 14.06.2016 finalizing the tenders for services of catering, contract for supply of vegetables, fruits, eggs, chicken etc.
5. In the reply affidavit filed thereto, the petitioners state that the Joint Collector, Mahaboobnagar issued proceedings dated 14.06.2016 finalizing the tenders for services of catering, contract for supply of vegetables, fruits, eggs, chicken etc. for social welfare residential schools, and minority residential schools, wherein traders have been permitted to participate in such tenders for supply of eggs; similar proceedings were issued on 16.07.2016 permitting supply of eggs by traders to Kasturba Gandhi Balika Vidayalayas; since the year 2010, the petitioners and other traders have been supplying eggs and, as of now, they are not supplying eggs to ICDS projects; the tender conditions are tailor-made to suit the convenience of only poultry farmers who have certification with the NECC; this condition has been imposed with a view to eliminate the traders at large from participating in the tender process; such a condition suffers from the vice of discrimination as it infringes Articles 14 and 19(1)(g) of the Constitution of India; the entire tender process adopted by the respondents is not transparent, and is unreasonable and unfair; the petitioners, being traders, have the right to equality and fair treatment on par with poultry farmers; G.O.Ms.No.12 dated 26.11.2014 does not stipulate any condition as imposed in the present tender notice; it is pursuant to the memo dated 09.12.2014, that such a stipulation is to be found; these guidelines are not even administrative instructions, and do not have the force of law; these proceedings were never brought to the notice of the Court earlier; the policy discriminates between farmers who have certification with the NECC, and other poultry farmers who have not; it also discriminates against traders, and thereby violates Articles 14 and 19(1)(g) of the Constitution of India; while the object of providing a balanced diet to the needy is well founded, classifying farmers and traders into two different categories, one with NECC registration and others without such certification, is discriminatory; the action of the respondents in allowing only poultry farmers to participate in the tender process, while preventing entry of traders, would defeat the very concept of competitiveness, and would result in loss of revenue to the Government; the NECC norms are irrelevant to the present Writ Petition, more so as NECC is neither a statutory body nor a government organization; the condition that the petitioners must have certification from NECC, to participate in the tender process, is untenable; and the action of the respondents in restricting entry into the tender process only to poultry farmers who have certification with NECC, and in not permitting traders who do not have certification with NECC to participate, is arbitrary, unreasonable, discriminatory and in violation of Articles 14 and 19(1) of the Constitution of India.
6. The petitioners sought amendment of the pleadings, and the prayer in W.P. No.24599 of 2016, by way of W.P.M.P. No.36043 of 2016, to include a challenge to the validity of G.O.Ms.No.12 dated 26.11.2014, and the consequential memos dated 09.12.2014 and 17.12.2014 issued by the State of Telangana (1st respondent). In the affidavit filed in support thereof, it is stated that it is only in the counter-affidavit filed before this Court is it stated that the petitioners had not challenged G.O.Ms.No.12 dated 26.11.2014, and the consequential memos dated 09.12.2014 and 17.12.2014; G.O.Ms. No.12 dated 26.11.2014 was never brought to the notice of the public either in the web-site, or in response to the earlier Writ Petition Nos.533 and 543 of 2015; the petitioners were not aware of the said G.O; the G.O. is contrary to public policy, and in violation of the fundamental rights guaranteed to the petitioner; it discriminates various tenderers including the petitioners from participating in the tender process; the memos dated 09.12.2014 and 17.12.2014, imposing a condition that the eggs shall be procured through DPC from NECC registered poultry farmers without third party involvement, suffers from the vice of discrimination as it infringes Article 14 of the Constitution of India; the policy of the State cannot be so tailor-made as to accommodate a few, and eliminate a large number of poultry farmers and suppliers; such a condition is wholly arbitrary and amounts to misuse and abuse of power, if any, vested with the respondents; the guidelines, framed under the said memos, do not have the force of law as they are not even in the nature of administrative instructions; these memos do not stand the test of judicial scrutiny; the terms of invitation to tenders, under the said memos, are arbitrary, discriminatory and opposed to all cannons of justice besides resulting in violation of the fundamental rights guaranteed under the Constitution of India; in respect of supply of eggs to various other governmental bodies, no such condition has been imposed by the Joint Collector, Mahaboobnagar District (3rd respondent); the State is also not achieving any objective out of the said imposition; and, on the other hand, the State is taking away the fundamental rights of poultry traders at large which is against the spirit of the public policy of the State.
W.P.M.P. No.36043 of 2016 is not opposed by the Learned Government Pleader, appearing on behalf of the Learned Additional Advocate-General, and is hence ordered.
W.P.M.P. No.36043 of 2016 is not opposed by the Learned Government Pleader, appearing on behalf of the Learned Additional Advocate-General, and is hence ordered. In the additional counter-affidavit dated 06.09.2016, the Director, Women Development and Child Welfare Department has stated that the government would procure eggs only from successful bidders i.e. poultry farmers alone; it would be ensured that the successful bidder would not supply eggs to the Anganwadi Centres procuring the same from third parties; the District Procurement Committee would ensure, at the time of opening of tenders and awarding the contract to the successful bidders, that they have the wherewithal to supply the required number of eggs to each of the projects, to which selection is made, only from their own poultry farm, and not by procuring eggs from other traders/districts; with respect to Mahaboobnagar district, the respondents have received 41 bids out of which 30 have NECC certification; Clause 3(d) of the memo dated 09.12.2014 requires NECC to monitor the supply and quality of eggs, and support the department in enforcing the guidelines issued by the government; representatives of the NECC are participating/involved in the government programmes, whereby eggs are supplied to beneficiaries ever since 2011; the Government conducts periodical meetings with NECC representatives, and the suggestions offered by them, to the problems faced in implementation of the scheme, are taken into consideration by the Government for better implementation of the scheme; the minutes of the meeting dated 31.01.2011 shows their involvement; the correspondence with NECC representatives disclose that they are monitoring the quality of the eggs supplied, and are supporting the department in enforcement of the guidelines issued by the Government; the District Procurement Committee, as constituted by memo dated 09.12.2014, has been given liberty to fix the terms and conditions for supply of eggs, to suit the local conditions prevailing in the respective districts; sufficient care is taken by the District Procurement Committee to ensure that each successful tenderer has the wherewithal to supply the required number of eggs, as indicated in the tender notification, without fail; only then would the District Procurement Committee award the contract; in Ranga Reddy district, there is a condition in the tender schedule that the bidder should produce invoices of the chicks purchased from May, 2015 to April, 2016; it has been a regular practice that, whenever bids are opened for awarding contract for supply of eggs, representatives of the NECC participate; whenever the District Procurement Committees have any doubt, in the process of evaluating the tenders, regarding the wherewithal of any tenderer/bidder poultry farm owner, the same is cross-checked with the representatives of NECC who have information regarding the capacity of the tenderer/bidder having membership with the NECC; there are around 100 poultry farmers registered with the NECC in Mahaboobnagar District; NECC representatives have also conducted awareness programmes regarding balanced diet/nutrition value of the eggs; NECC representatives not only support the department in monitoring the supply and quality of eggs, but also espouse the cause of suppliers whenever there is delay in payment; the State of Telangana has developed an app called “commodity supply tracking system” for monitoring supply of eggs; the Government would, thereby, ensure that the eggs supplied to the Anganwadi centres are of the required quality and quantity, and only then will payment be released to the suppliers; and, because of the interim orders in the Writ Petition, supply of eggs to the beneficiaries is adversely affected.
In the additional reply affidavit dated 09.09.2016, it is stated that, as per the tender schedule, the rate of eggs is fixed; the tenderers, whether poultry farmers or traders, only bid for transport charges; the contract is essentially for transportation of eggs to various centres/Anganwadi centres in a particular ICDS project; in the neighbouring States like Tamilnadu, Karnataka and Maharashtra, traders are not excluded from the tender process for supply of eggs; the main objective of NECC is to safeguard the interests of poultry farmers, and ensuring a proper rate for each egg; the average rate that is determined to be paid to the tenderer would also ensure that the poultry farmer gets his price/rate per egg with or without participation in the tender; the tender schedule requires only local farmers to participate in the tender process; and this is not a practical view, because of non-availability of poultry farms. 7. After indicating certain areas in nine districts of Telangana, where there are no poultry farms, the petitioners also state that NECC does not have the man power, like doctors and scientists, who can check the quality of eggs; officers such as the Child Development Project Officer, the Project Director, the Supervisor, the Assistant Project Director, teachers of Anganwadi Centres, etc are available, and are in charge of maintaining the quality of eggs; besides these officers, there are other officers of the Government available for checking the quality of eggs; NECC does not engage in monitoring supply and quality of eggs, and support the department in enforcing the guidelines issued by the Government; the memo dated 09.12.2014 does not have the force of law, and is not traceable to any statutory power; the backward class welfare gurukula vidyalayas have also issued a notification dated 04.06.2016 inviting tenders for supply of various items including eggs, where the NECC certification has not been insisted upon; there are several other instances where such a condition is not insisted upon; and the contention of the respondents, in the additional counter-affidavit, that imposition of such a condition is only in respect of ICDS projects is arbitrary, discriminatory and in violation of Article 14 of the Constitution of India. 8.
8. Sri D. Prakash Reddy, learned Senior Counsel appearing on behalf of the petitioners, (who are all traders supplying eggs to various organisations) would question the validity of the condition, imposed in the impugned tender notification, that only NECC registered poultry farmers in Mahboobnagar district are eligible to submit their bids for supply of eggs to each of the 20 projects in the district. According to the learned Senior Counsel, this condition does not satisfy the test of a valid classification under Article 14 of the Constitution of India; the policy decision of the Government in G.O.Ms.
According to the learned Senior Counsel, this condition does not satisfy the test of a valid classification under Article 14 of the Constitution of India; the policy decision of the Government in G.O.Ms. No.12 dated 26.11.2014, and the memos issued pursuant thereto, show that the object of procuring eggs is only to provide a nutritious meal to pregnant women, lactating mothers, and children aged between seven months and six years; to achieve this object, it is wholly unnecessary that eggs should be procured only from poultry farmers, that too with NECC registration; poultry farmers with 250 layers (birds), or traders supplying 11,000 eggs per day, are eligible for NECC registration; a poultry farmer with only 250 layers would not be able to supply the large number of eggs required by each of the 20 projects in terms of the notification, and can effect supplies only if they procured eggs from others; in such circumstances, he would also be a trader for supply of eggs, beyond the eggs available in his farm; the price per egg is stipulated, in the notification, as the NECC rate of Rs.3.50 per egg; the supply contract is, in effect, only a transport contract; the tender conditions do not stipulate that the poultry farmers should have the required transport facilities to ensure supply of eggs within time; the restriction that supplies should be effected only by poultry farmers, that too with those who have NECC registration, in a transport contract, is not only arbitrary and in violation of Article 14 of the Constitution of India, but also affects the petitioners’ fundamental right, to carry on business, under Article 19 (1)(g) of the Constitution of India; no material is placed before this Court to show how the authorities would ensure quality of the eggs; neither the policy decision of the Government, nor the tender notification, disclose the basis for holding that fresh farm eggs cannot be supplied by traders; excluding traders from consideration restricts competition, and would cause loss to the public exchequer; traders should not be excluded, and must be permitted to compete with poultry farmers; supply of eggs is a commercial transaction wherein price alone is the relevant criteria; as the price of an egg is fixed on par with the NECC rate, it is only the ability of a tenderer to deliver the eggs to the destination point within time, and at a lower cost, which is relevant; the stipulated condition, that eggs should be supplied only by poultry farmers, is irrelevant; there is no mechanism to verify the quality of the eggs supplied to the centres; it is not even the case of the authorities that NECC agents are present throughout the State to ascertain the quality of the eggs supplied at the centres; the tender condition does not require poultry farmers to disclose the number of birds he owns; no standards are prescribed for supply of eggs nor does NECC certify eggs to be of any particular standard; the object of providing a nutritious meal, to the categories of persons specified in the GO, is not achieved by the impugned classification whereby traders are excluded from consideration; the submissions of the learned Government Pleader, made across the Bar, is an improvement of the notification issued by the Government; a post qualification verification process, regarding quality of the eggs, can be uniformly applied to all eligible suppliers including traders; the validity of the bid document cannot be examined on the basis of unauthenticated information obtained by the respondent subsequent to the last date for submission of the bid; and the condition, prescribed in the present tender notification, is limited to supplies made under the Integrated Child Development Scheme, and has not been prescribed for supply of eggs under several other schemes being implemented by the State Government.
Learned Senior Counsel would rely on CSR Infratech India Pvt Ltd v. Government of A.P (2014) 4 ALD 652 ) in this regard.
Learned Senior Counsel would rely on CSR Infratech India Pvt Ltd v. Government of A.P (2014) 4 ALD 652 ) in this regard. On the other hand the learned Government Pleader, appearing on behalf of the learned Additional Advocate-General, would submit that procurement of eggs is to ensure adequate and timely supply of fresh farm eggs to those who need it the most, such as pregnant women, lactating mothers and children aged between seven months to six years; these supplies of eggs are required to be effected three times each month; it is only if there is timely supply of eggs can it be ensured that persons, for whom such supplies are made, receive it in time; as eggs have nutritive value, the quality of eggs is also a relevant criteria, in addition to its weight of 50 grams each; this object can be achieved if eggs are procured from poultry farmers; NECC is a country wide organisation which promotes supply and consumption of eggs; it has been actively co-ordinating with the State Government, for the past several years, in ensuring effective and prompt supply of eggs for its consumption by the weaker sections of society; the factors which weighed with the Government, in imposing the conditions in the tender, is to ensure timely supply of eggs and procurement of farm fresh eggs, which can be achieved if eggs are procured from poultry farmers avoiding intervention of third parties; the object sought to be achieved is not only timely supply, but also supply of fresh farm eggs; the petitioners are not poultry farmers, and cannot espouse the cause of poultry farmers who are not registered with the NECC; the stipulation in the tender conditions, restricting supply of eggs only by poultry farmers within the District, is to procure eggs from sources in close proximity to the project centres; the possibility of traders quoting a higher price for transportation, and in not supplying fresh eggs within time, necessitated imposition of the condition that third party intervention be avoided; if prompt supplies are not made by traders, or the eggs supplied by them are not of the prescribed weight and quality, it is difficult to identify the source of supply and to hold them accountable; these problems can be avoided if eggs are procured only from poultry farmers; the State must be permitted to have a play in its joints to achieve these objects; this Court would not act as an appellate authority, while exercising jurisdiction under Article 226 of the Constitution of India, to determine whether the classification is perfect or exact; no interference is called for as the classification satisfies the broad parameters of a valid classification; NECC fixes the price of eggs to be supplied to various organisations and consumers throughout the country; and NECC representatives are involved in the bid process also, and have extended their cooperation to the department in ascertaining the wherewithal of the suppliers to supply eggs.
Learned Government Pleader would rely on Air India Ltd v. Cochin International Airport Ltd (2000) 2 SCC 617 ) and Premium Granites v. State of Tamilnadu (1994) 2 SCC 691) in this regard. As the proceedings under challenge in this Writ Petition is the tender notification dated 16.07.2016, G.O.Ms. No.12 dated 26.11.2014 and the consequential Government memos dated 09.12.2014 and 17.12.2014, it is useful to note its contents. The 2nd respondent issued tender notice dated 16.07.2016, inviting applications from NECC registered poultry farmers in Mahaboobnagar District to participate in the supply of eggs under any one of the projects. The tender notification stipulates the number of egg required to be supplied each month to each of the projects, the EMD amount to be deposited, and the EMD amount to be produced along with the tender form. The notification informs the tenderers that the other details are available in the website; the tender processing fee, and the earnest money deposit, should be paid to the Director, District Women and Child Development Agency, Mahaboobnagar; the tender should be submitted online; the documents, relating to the technical bid, the EMD, and other processing fees, should be submitted in the office; and the tender, submitted without EMD and processing fee, will be rejected. The last date for submission of the tender was 28.07.2016, and the technical bids and financial bids were to be opened on 29.07.2016. 9. The Government of Telangana had earlier issued G.O.Ms. No.12 dated 26.11.2014, revising the earlier orders regarding the Supplementary Nutrition Programme (SNP), under the Integrated Child Development Scheme (ICDS), for implementation of the One Full Meal Programme for ICDS beneficiaries. The G.O. states that the Government had decided to implement the revised and new feeding norms of One Full Meal Programme, for all Pregnant and Lactating Mothers, with 200 ml of milk and one egg for 30 days in the month in all the ICDS projects, and to provide eggs for 30 days in a month for all children aged between 7 months and 6 years in all Anganwadi centers by bridging the gaps in the existing schemes.
The G.O. envisages extending the one full meal programme, to all Pregnant & Lactating Women, in the remaining 68 ICDS projects covering 16,021 Anganwadi centers; to provide one egg for 30 days in a month, in the present one full day meal programme implemented in all the 149 ICDS projects covering all 35,973 Anganwadi centers; to scale up the programme by providing 30 eggs per month to children in the age group of 7 months to 6 years in 35,973 Anganwadi centers in 149 projects; enhance the quality of the meal to mothers, ensuring that the food supplied is consumed only by mothers, rather than the whole family; ensure that pregnant women consume 100 IFA tablets throughout the pregnancy period, by providing IFA tablets along with the one full meal; improve the enrollment of mothers at Anganwadi centers; reduce the incidence of anaemia and malnutrition in pregnant and lactating mothers; reduce the incidence of low birth weight babies, and malnutrition among children; ensure that mothers receive health checkups and immunization; and reduce the incidence of infant mortality and maternal mortality. An additional budget of nearly 84.83 crores was sanctioned, under the said G.O, for implementation of this programme in all ICDS projects. Pursuant to the scheme formulated in G.O.Ms. No.12 dated 26.11.2014, the Government had issued Memo No.3462/Schemes. A1/2014 dated 09.12.2014 prescribing operational guidelines for implementation of the One Full Meal Programme. The guidelines provides for the constitution of a One Full Meal Committee. It prescribes the duties and responsibilities of the committee, the mode of procurement, the food model for spot feeding of pregnant and lactating women, and other beneficiaries, in the ICDS one full meal programme. It stipulates that eggs should be procured only from NECC registered poultry farmers without third party intervention, and that NECC should monitor the supply and the quality of eggs, and support the department in enforcing the guidelines. In terms thereof, 30 eggs per month, costing Rs.3.50 each, is required to be provided to pregnant and lactating women. For children between 7 months and 3 years, 30 eggs per month is required to be provided for spot feeding i.e., 1 egg per day of 50 grams each at the cost of Rs.3.50 per egg. While one egg is to be provided from Monday to Friday, two eggs are required to be provided on Saturday.
For children between 7 months and 3 years, 30 eggs per month is required to be provided for spot feeding i.e., 1 egg per day of 50 grams each at the cost of Rs.3.50 per egg. While one egg is to be provided from Monday to Friday, two eggs are required to be provided on Saturday. Similarly one egg of 50 grams each, at a cost of Rs.3.50 per egg, is required to be provided for spot feeding of children aged between 3 to 6 years. 10. The Government issued memo dated 17.12.2014 asking the Director, Women and Child Welfare to ensure that eggs are procured, through District Procurement Committees, from NECC registered poultry farmers without third party involvement; the NECC rate and transportation charges should be based on the distance duly following the terms and conditions of the tender and all other instructions, prescribed in the guidelines issued in Government memo dated 09.12.2014 should be followed. 11. The petitioners are all traders, and are not poultry farmers. The tender conditions exclude them from consideration, as it restricts supply of eggs, to the 20 ICDS centres in Mahaboobnagar District, only by NECC registered poultry farmers. This, by itself, cannot be said to have violated the petitioners fundamental rights under Article 19(1)(g) of the Constitution of India to carry on any trade or business. Under Clause (1) (g) of Article 19, every citizen has the freedom and right to choose his own employment or take up any trade or calling subject only to the limits as may be imposed by the State in the interests of public welfare and the other grounds mentioned in clause (6) of Article 19. (Saghir v. State of U.P. ( AIR 1954 SC 728 = 1955 (1) SCR 707 ); Krishnan Kakkanth v. Govt. of Kerala (1997) 9 SCC 495 ). 12. Fundamental rights, guaranteed under Article 19 of the Constitution, are not absolute, but are subject to reasonable restrictions to be imposed against enjoyment of such rights. Such reasonable restrictions seek to strike a balance between the freedom guaranteed by any of the clauses under Article 19(1) and the social control permitted by clauses (2) to (6) of Article 19.
12. Fundamental rights, guaranteed under Article 19 of the Constitution, are not absolute, but are subject to reasonable restrictions to be imposed against enjoyment of such rights. Such reasonable restrictions seek to strike a balance between the freedom guaranteed by any of the clauses under Article 19(1) and the social control permitted by clauses (2) to (6) of Article 19. The reasonableness of the restriction is to be determined in an objective manner and from the standpoint of the interests of general public, and not from the standpoint of the interests of the persons upon whom the restriction are imposed or upon abstract considerations. A restriction cannot be said to be unreasonable merely because, in a given case, it operates harshly and even if the persons affected be traders. (Mohd. Hanif v. State of Bihar ( AIR 1958 SC 731 ); Krishnan Kakkanth (supra). 13. In determining the infringement of the right guaranteed under Article 19(1), the nature of the right alleged to have been infringed, the underlying purpose of the restriction imposed, the extent and urgency of the evil sought to be remedied thereby, the disproportion of the imposition, the prevailing conditions at the time, enter into the judicial verdict. (Laxmi Khandsari v. State of U.P. ( AIR 1981 SC 873 ); Treveli v. State of Gujarat ( AIR 1968 SC 1323 ); Herekchand Ratanchand Banthia v. Union of India ( AIR 1970 SC 1453 ); Krishnan Kakkanth (supra). Canalisation of a particular business in favour of specified individuals is reasonable where vital interests of the community are concerned. (Parbhani Transport Coop. Society Ltd v. Regional Transport Authority ( AIR 1960 SC 801 ); Shree Meenakshi Mills Ltd. v. Union of India (1974) 1 SCC 468 ); Lala Hari Chand Sarda v. Mizo District Council ( AIR 1967 SC 829 = 1967(1) SCR 1012 ); and Krishnan Kakkanth (supra). 14. Although a citizen has a fundamental right to carry on a trade or business, he has no fundamental right to insist that the Government or any other individual should carry on business with him. The government, or the individual concerned, has the right to enter into contract with a particular person or to determine person or persons with whom he or it will deal. (Krishnan Kakkanth (supra).
The government, or the individual concerned, has the right to enter into contract with a particular person or to determine person or persons with whom he or it will deal. (Krishnan Kakkanth (supra). The Constitution does not recognise franchise or rights to business which are dependent on grants by the State or business affected by public interest. (Saghir, Krishnan Kakkanth). No person can claim a fundamental right to carry on business with the government, and all that he can claim is that, in competing for the contract, he should not be unfairly treated and discriminated to the detriment of public interest. (Association of Registration Plates v. Union of India (2005) 1 SCC 679 ); Erusian Equipment & Chemicals Ltd. v. State of W.B. (1975) 1 SCC 70 ). As the petitioners cannot insist that the Government should carry on business with them, or procure eggs from them alone, refusal by the respondents to include traders, among the categories from whom eggs for these 20 ICDS centres in Mahaboobnagar District would be procured, does not violate the petitioners fundamental rights under Article 19(1)(g) of the Constitution of India. The challenge to the validity of the impugned tender notification, and to G.O.Ms. No.12 dated 26.11.2014 and the memos issued pursuant thereto, on this ground necessitates rejection. 15. Before examining whether or not the aforesaid tender condition, G.O.Ms. No.12 dated 26.11.2014 and the Government memos dated 09.12.2014 and 17.12.2014 are in violation of Article 14 of the Constitution of India, it is necessary to consider the scope of judicial review of prescription of conditions by the Government in an invitation to tender. While contractual matters are not beyond the realm of judicial review, its application is limited (Noble Resources Ltd. v. State of Orissa (2006) 10 SCC 236 ); Indian Oil Corpn. Ltd. v. Amritsar Gas Service (1991) 1 SCC 533 = 1990 4 JT 601 ); and LIC of India v. Escorts Ltd. ( AIR 1986 SC 1370 ) primarily to the infirmity in the decision making process, and whether it is reasonable and rational or arbitrary and in violation of Article 14 of the Constitution of India. (Sterling Computers Ltd v. M & N Publications Ltd ( AIR 1996 SC 51 ). The Court does not sit as a Court of appeal, but merely reviews the manner in which the decision was made.
(Sterling Computers Ltd v. M & N Publications Ltd ( AIR 1996 SC 51 ). The Court does not sit as a Court of appeal, but merely reviews the manner in which the decision was made. Although the terms of the invitation to tender is not open to judicial scrutiny as it is in the contractual realm, Courts can examine the award of contract, by the Government or its agencies, to prevent arbitrariness or favouritism. (Noble Resources Ltd. (supra); Binny Ltd. v. V. Sadasivan (2005) 6 SCC 657 ); G.B. Mahajan v. Jalgaon Municipal Council ( 1991 1 JT 605 ); Directorate of Education v. Educomp Datamatics Ltd. (2004) 4 SCC 19 ). 16. There are inherent limitations in the exercise of judicial review of contractual powers as the Government must have the freedom of contract and a free-play in the joints. The duty to act fairly will vary in extent, depending upon the nature of cases to which the said principle is sought to be applied. (Tata Cellular v. Union of India ( AIR 1996 SC 11 ). The actions of the State are amenable to judicial review only to the extent that the State must act validly for a discernible reason and not whimsically for any ulterior purpose. In the matter of formulating conditions of a tender document, and in awarding a contract, greater latitude is required to be conceded to the State authorities. Unless the action of the tendering authority is found to be malicious, interference by Courts is not warranted. If the State or its instrumentalities act reasonably, fairly and in public interest in awarding the contract, interference by the Court is limited. (M/s. Michigan Rubber (I) Ltd. v. State of Karnataka (Judgment of the Supreme Court in Civil Appeal No.5898 of 2012 dated 17.08.2012); C.S.R. Infratech India Pvt. Ltd, Hyderabad (supra). 17. 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. (Air India Ltd. (supra). Price need not always be the sole criterion for awarding a contract. But the State is bound to adhere to the norms, standards and procedures laid down, and cannot depart from them arbitrarily.
It can fix its own terms of invitation to tender, and that is not open to judicial scrutiny. (Air India Ltd. (supra). Price need not always be the sole criterion for awarding a contract. But the State is bound to adhere to the norms, standards and procedures laid down, and cannot depart from them arbitrarily. Though that decision is not amendable to judicial review, the Court can examine the decision making process and interfere if it is found vitiated by malafides, unreasonableness and arbitrariness. (Air India Ltd. (supra). If two views are possible, and no mala fides or arbitrariness is alleged or shown, there is little scope for interference with the view taken by the authorities in inviting tenders. (Reliance Airport Developers (P) Ltd. v. Airports Authority of India (2006) 10 SCC 1 ); Siemens Public Communication Networks (P) Ltd. v. Union of India (2008) 16 SCC 215 ). 18. Bearing the aforesaid principles in mind, let us now examine the petitioners challenge to the validity of the tender notification, the impugned G.O and memos, on the ground that it violates Article 14 of the Constitution of India. Sri D. Prakash Reddy, Learned Senior Counsel, would submit that the classification between NECC registered poultry farmers on the one hand, and poultry traders on the other, has no nexus with the object sought to be achieved which is to provide eggs to the beneficiaries, of the One Full Meal scheme in terms of G.O.Ms. No.12 dated 26.11.2014, at the lowest possible price. According to the Learned Senior Counsel since the price of the eggs is fixed at the NECC rate of Rs.3.50 per egg, the tender notification is, in effect, an invitation for bids for a transport contract, and the object sought to be achieved thereby is to transport the eggs to the ICDS centres at the minimum stipulated price; and, in the light of the aforesaid object, it hardly matters whether the eggs are transported by traders or by poultry farmers. 19. Before examining this contention, it is necessary to first consider the tests prescribed for a valid classification under Article 14 of the Constitution of India.
19. Before examining this contention, it is necessary to first consider the tests prescribed for a valid classification under Article 14 of the Constitution of India. In order to pass the test of a permissible classification under Article 14 two conditions must be fulfilled, namely, (i) the classification must be founded on an intelligible differentia which distinguishes persons or things that are grouped together from others left out of the group and (ii) the differentia must have a rational relation to the object sought to be achieved. In order to accept a classification as permissible, and not hit by Article 14, the measure in question will have to pass these twin tests. (Dimapati Sadasiva Reddi, Vice-Chancellor, Osmania University v. Chancellor ( AIR 1967 SC 1305 ); Budhan Choudhry v. State of Bihar (1955) 1 SCR 1045 ); Ram Krishna Dalmia v. Shri Justice S.R. Tendolkar (1959) SCR 279). The classification may be founded on different basis. What is necessary is that there must be a nexus between the basis of classification and the object of the policy under consideration. (State of Maharashtra v. Indian Hotel & Restaurants Assn. (2013) 8 SCC 519 ); Budhan Choudhry (supra). 20. Article 14 forbids class legislation, and not a reasonable classification. Persons similarly situated must be similarly treated. Where, however, the persons are not similarly situated, there is no prohibition to treat them separately, provided of course there is a reasonable nexus between the basis of classification and the object sought to be achieved. (K. Muthusamy v. Government of Tamilnadu (LAWS -TLMAD 2003-0-582: MANU/TN/0192/2003). Every instance of discrimination does not necessarily fall within the ambit of Article 14 of the Constitution. Discrimination means an unjust and unfair action in favour of one and against another. It involves an element of intentional and purposeful differentiation and unfavourable bias, an unfair classification. (Rajasthan State Industrial Development & Investment Corporation v. Subhash Sindhi Coop. Hs. Society (2013) 5 SCC 427 ); The State of M.P. v. Narmada Bachao Andolan (2011) 7 SCC 639 ); Madhu Kishwar v. State of Bihar (1996) 5 SCC 125 ). 21. A valid classification based on a just objective is truly a valid discrimination. The result to be achieved by the just objective presupposes the choice of some for differential consideration/treatment over others.
21. A valid classification based on a just objective is truly a valid discrimination. The result to be achieved by the just objective presupposes the choice of some for differential consideration/treatment over others. Legalistically, the test for a valid classification may be summarized as a distinction, based on a classification founded on an intelligible differentia, which has a rational relationship with the object sought to be achieved. (Kallakkurichi Taluk Retired Officials Assn. v. State of T.N. (2013) 2 SCC 772 ). 22. Classification must be truly founded on substantial differences which distinguish persons grouped together from those left out of the group and such differential attributes must bear a just and rational relation to the object sought to be achieved. (Indian Hotel & Restaurants Assn. (supra); State of Jammu and Kashmir v. Triloki Nath Khosa (1974) 1 SCC 19 ). 23. The doctrine of reasonable classification recognises that the classification must be reasonable. It should ensure that persons or things similarly situated are all similarly treated. The measure of reasonableness of a classification is the degree of its success in treating similarly those similarly situated. The question is: what does this ambiguous and crucial phrase “similarly situated” mean? The test which has been evolved for this purpose is that the classification must be founded on an intelligible differentia which distinguishes certain persons or things that are grouped together from others and that differentia must have a rational relation to the object sought to be achieved. (Mohd. Shujat Ali v. Union of India ( AIR 1974 SC 1631 ). 24. It is not even urged by Sri D. Prakash Reddy, Learned Senior Counsel for the petitioners, that poultry farmers (be they registered with NECC or not), and poultry traders, do not constitute two different and distinct classes. The question whether non-NECC registered poultry farmers have been discriminated against is a question which need not detain us in the present Writ Petition, as the challenge to the validity of the notification is not by poultry farmers who are not registered with the NECC, but by traders all of whom are not being considered for supply of eggs to the ICDS centres in Mahaboobnagar District. While poultry farmers supply eggs from their farms, traders have to procure eggs from the poultry farmers and, in turn, supply them to the 2nd respondent at the respective ICDS centres.
While poultry farmers supply eggs from their farms, traders have to procure eggs from the poultry farmers and, in turn, supply them to the 2nd respondent at the respective ICDS centres. It is evident, therefore, that poultry farmers and traders constitute two distinct and different classes. The only question which necessitates examination is whether such classification has a reasonable nexus with the object sought to be achieved. 25. In order to examine this question, it is necessary to take note of the objects which the Government claims that it seeks to achieve by way of the present classification. As noted hereinabove, the impugned tender notification was issued pursuant to G.O.Ms. No.12 dated 26.11.2014, and the memos issued by the Government dated 09.12.2014 and 17.12.2014. By G.O.Ms. No.12 dated 26.11.2014 the State Government revised the earlier orders regarding the supplementary nutrition programme under the Integrated Child Development Scheme for implementation of the One Full Meal Programme for all pregnant and lactating mothers, and for children aged between 7 months and 6 years in all the Anganwadi centres. In terms of the policy in G.O.Ms. No.12 dated 26.11.2014, the Government decided to supply 30 eggs a month i.e. one egg per day between Monday and Friday and two eggs on Saturday. The scheme attempts to provide all pregnant women, lactating mothers and infants a quality meal each day, and requires the beneficiaries to consume the eggs at the centre itself, and not carry it home as it may then be consumed by other members of their respective families. The object of G.O.Ms. No.12 dated 26.11.2014 is to reduce the incidence of infant mortality and maternal mortality. In addition to the existing budget, the Government sanctioned Rs.84.83 crores as an additional budget under this scheme. 26. The operational guidelines, in Government memo dated 09.12.2014, prescribe the modalities of supply for effective implementation of the One Full Meal Programme, and to improve the nutritional status of pregnant and lactating women, and reduce low birth weight and mortality of infants and children under 6 years. Clause II (2) thereof stipulates that the eggs shall be procured by the District Procurement Committees from NECC registered poultry farmers without third party involvement, and the average annual cost of an egg, including transport charges, should not exceed Rs.3.50.
Clause II (2) thereof stipulates that the eggs shall be procured by the District Procurement Committees from NECC registered poultry farmers without third party involvement, and the average annual cost of an egg, including transport charges, should not exceed Rs.3.50. Clause II (3)(d) of the said guidelines requires NECC to monitor the supplies and the quality of eggs, and support the department in enforcing the guidelines. The Government memo dated 17.12.2014 was issued in partial modification of the operational guidelines issued under the Government memo dated 09.12.2014 and, instead of the cost of an egg including transport being stipulated at Rs.3.50 per egg, it was decided that the NECC rate and transport charges be paid based on the distance duly following the terms and conditions. The requirement of procuring eggs through NECC registered poultry farmers without third party involvement is stipulated in Clause II (2) of the operational guidelines issued under the Government memo dated 09.12.2014, for implementation of the policy decision of the Government in G.O.Ms. No.12 dated 26.11.2014, and is being implemented in all Integrated Child Development Schemes in the entire State of Telangana. The object, as has been stated by the Learned Government Pleader, is to supply fresh farm eggs within time to the ICDS centres to ensure timely supply of quality eggs to pregnant and lactating mothers, and infants aged 6 years and below. As noted hereinabove the traders can supply eggs only after procuring them from poultry farmers. The decision of the Government to procure eggs directly from poultry farmers, without third party intervention, has a reasonable nexus with the object of timely supply of fresh farm eggs to the beneficiaries of the Integrated Child Development Scheme. 27.
As noted hereinabove the traders can supply eggs only after procuring them from poultry farmers. The decision of the Government to procure eggs directly from poultry farmers, without third party intervention, has a reasonable nexus with the object of timely supply of fresh farm eggs to the beneficiaries of the Integrated Child Development Scheme. 27. In reply to the contention that, even poultry farmers having merely 250 birds are entitled to be registered with NECC and, as the requirement of eggs is far more than what such small poultry farmers can supply, they would also be traders for the number of eggs to be supplied beyond what is available with them, the respondents, in their additional counter-affidavit, have specifically stated that the Government would procure eggs from poultry farmers alone, it would be ensured that the successful bidders would not supply eggs to the Anganwadi centres procuring them from third parties, and the District Procurement Committees would ensure, at the time of opening the tenders and awarding the contract to the successful bidders, that they have the wherewithal to supply the required number of eggs. Learned Government Pleader, appearing on behalf of the Learned Additional Advocate General, has placed before us a detailed statement of the bids received pursuant to the impugned tender. The said statement contains the name of each of the poultry farmers who had participated in the tender process, and the number of birds in each of these poultry farms. He would submit that, from out of the 41 bids received from poultry farmers, 30 poultry farmers were registered with NECC; while 28 of these 30 poultry farmers have more than 30,000 birds each, 12 of them have 75,000 or more birds, 9 of them have more than one lakh birds each, and six of them have two lakhs or more birds; the accepted yield is 90% i.e, 30,000 birds would yield 27,000 eggs per day, and 2,00,000 birds would yield 1,80,000 eggs per day; as the maximum monthly requirement, under the impugned notification dated 16.07.2016, is for the Gadwal project i.e., 7,81,160 eggs per month i.e., approximately 26,000 eggs per day, it is clear that the bids received, from NECC registered poultry farmers in Mahaboobnagar District, are sufficient to cater to the monthly egg requirements, of each of the 20 projects, in Mahaboobnagar District.
It is evident, therefore, that a substantial number of bidders, who are all poultry farmers, have the capacity to supply eggs from their own poultry farms, without having to procure it from elsewhere. 28. While the submission of Sri D.Prakash Reddy, Learned Senior Counsel, that exclusion of traders from the tender process is unnecessary as the respondent can ensure supply of quality eggs within time even by the traders, cannot be said to be without merit, it must be borne in mind that the complaint, of violation of Article 14 of the Constitution, cannot be judged by adopting a doctrinaire approach. It is not prudent or pragmatic to insist on a mathematically accurate classification covering diverse situations and all possible contingencies in view of the inherent complexities involved. (State of Karnataka v. Mangalore University Non-Teaching Employees Association (2002) 3 SCC 302 ). Classification, to be valid under Article 14, need not necessarily fall within an exact or a scientific formula for exclusion or inclusion of persons or things. There is no requirement of mathematical exactness for determining the validity, as long as it is not palpably arbitrary. (Indian Hotel & Restaurants Assn. (supra); Ram Krishna Dalmia (supra); Welfare Association, A.R.P. v. Ranjit P.Gohili (2003) 9 SCC 358 ); Shashikant Laxman Kale v. Union of India (1990) 4 SCC 366 ). 29. The Execute enjoys considerable latitude, and exercises its power of classification enriched by its experience and taking into consideration myriad circumstances. (Ombalika Das v. Hulisa Shaw (2002) 4 SCC 539 ). Precision and arithmetical accuracy will not exist in any categorisation, and such precision and accuracy is not what Article 14 contemplates. As long as the broad features of the categorisation are identifiable and distinguishable, and the categorisation is reasonably connected with the object targeted, Article 14 does not forbid such a course of action. (Subramanian Swamy v. Raju (2014) 8 SCC 390 ); Murthy Match Works v. CCE (1974) 4 SCC 428 ); Roop Chand Adlakha v. DDA (1989 Suppl. (1) SCC 116); Kartar Singh v. State of Punjab (1994) 3 SCC 569 ); Basheer v. State of Kerala (2004) 3 SCC 609 ); State of Madhya Pradesh v. Gopal D. Tirthani (2003) 7 SCC 83 ); B. Manmad Reddy v. Chandra Prakash Reddy (2010) 3 SCC 314 ) and Transport and Dock Workers Union v. Mumbai Port Trust (2011) 2 SCC 575 ). 30.
30. This Court would not sit in appeal over executive judgment to find out whether, on a comparative evaluation of the rival theories touching upon the wisdom of the policy, the theory advocated by the petitioners is to be preferred. Classification is primarily for the authority charged with the duty of framing the eligibility criteria and if, looked at from the standpoint of the authority making it, the classification is found to rest on a reasonable basis, it has to be upheld. (Triloki Nath Khosa (supra). The test ought not to be what would be a ‘better’ basis for the categorization for that would introduce subjectivity in the process. The test is whether categorization, on the basis adopted, results in hostile discrimination and adoption of the criteria has no reasonable nexus with the object sought to be achieved. (Samaj Parivartana Samudaya v. State of Karnataka (2013) 8 SCC 154 ). 31. It is only where the decision is shown to be based on extraneous or irrelevant considerations or is actuated by malafides or is irrational and perverse or is manifestly wrong that the Court would reach out its lethal arm and strike down the decision. (Mohd. Shujat Ali (supra). 32. The submission that this Court should not take note of the contents of the counter-affidavit, wherein it is stated that eggs would be procured only from NECC registered poultry farmers who have the wherewithal to supply the entire quantity of eggs to the ICDS centres for which they have submitted their bids, as the impugned notification does not contain such a stipulation, is only to be noted to be rejected. In order to establish that the protection of the equality clause has been denied to them, it is not enough for the petitioners to say that they have been treated differently from others, not even enough that a differential treatment has been accorded to them in comparison with others similarly circumstanced. Discrimination is the essence of classification and does violence to the constitutional guarantee of equality only if it rests on an unreasonable basis. It is for the petitioners to show that the classification is unreasonable and bears no rational nexus with its purported object. (Triloki Nath Khosa (supra). The person assailing the classification "carries the heavy burden of making a convincing showing that it is invalid because it is unjust and unreasonable in its consequences, (Shri Sitaram Sugar Co.
It is for the petitioners to show that the classification is unreasonable and bears no rational nexus with its purported object. (Triloki Nath Khosa (supra). The person assailing the classification "carries the heavy burden of making a convincing showing that it is invalid because it is unjust and unreasonable in its consequences, (Shri Sitaram Sugar Co. Ltd. v. Union of India (1990) 3 SCC 223 ); Federal Power Commission v. Hope Gas Co. (320 US 591, 602 (1944), or that there has been a clear transgression of the constitutional principles. (Ram Krishna Dalmia (supra); Gauri Shanker v. Union of India (1994) 6 SCC 349 ). 33. Where a party seeks to impeach the validity of a classification on the ground that they offend Article 14, the burden is on him to plead and prove the infirmity, to set out facts necessary to sustain the plea of discrimination, and to adduce “cogent and convincing evidence” to prove those facts for “there is a presumption that every factor which is relevant or material has been taken into account in formulating the classification”. Unless the classification is unjust on the face of it, the onus lies upon the party attacking the classification to show, by pleading and placing the necessary material before the Court, that the said classification is unreasonable and is violative of Article 14 of the Constitution. (Triloki Nath Khosa (supra); G.D. Kelkar v. Chief Controller of Imports and Exports ( AIR 1967 SC 839 ). It is no part of the respondent’s burden to justify the classification or to establish its constitutionality. (Triloki Nath Khosa (supra). 34. The basis of the classification of persons or things may appear on the face of the policy or may be gathered from the surrounding circumstances known to or brought to the notice of the Court. (Ram Krishna Dalmia (supra); Gauri Shanker (supra). Relevant material is always admissible to show the reason and the justification for the classification. Such reasons need not appear on the face of the Rule or the law or the policy which effects the classification. (Triloki Nath Khosa (supra). We are satisfied that the classification of suppliers under the impugned notification, and restriction on supply of eggs only by NECC registered poultry farmers, neither suffers from the vice of discrimination nor can it be said to be arbitrary and in violation of Article 14 of the Constitution of India.
(Triloki Nath Khosa (supra). We are satisfied that the classification of suppliers under the impugned notification, and restriction on supply of eggs only by NECC registered poultry farmers, neither suffers from the vice of discrimination nor can it be said to be arbitrary and in violation of Article 14 of the Constitution of India. The petitioners are not poultry farmers and it is, therefore, unnecessary for this Court, in a Writ Petition instituted by them, to examine whether excluding non-NECC registered poultry farmers from consideration would violate the equality clause under Article 14 of the Constitution of India. While the submission of Sri D. Prakash Reddy, Learned Senior Counsel appearing on behalf of the petitioners, that no material has been placed on record to show that NECC has the wherewithal to ensure quality of the eggs cannot be said to be without merit, we would not be justified in examining the credibility or the capacity of NECC to ensure quality of the eggs in the present Writ proceedings, or to record a finding in this regard, as NECC is not arrayed as a respondent in the Writ Petition and does not, therefore, have the opportunity of being heard in this regard. Recording any adverse finding against them, behind their back, would be wholly inappropriate. 35. The stipulation in the tender notification, that eggs shall be procured only from NECC registered poultry farmers without third party involvement, is in accordance with the condition prescribed in the operational guidelines under the Government memo dated 09.12.2014, which were issued to implement the policy decision of the Government in G.O.Ms. No.12 dated 26.11.2014. Courts do not normally interfere with the policy decisions of the Government. The wisdom in a policy decision of the Government is not justiciable unless it is capricious, arbitrary, whimsical so as to offend Article 14 of the Constitution or any statutory or constitutional provision. The only thing to be seen by the Court, when a policy decision is assailed, is whether the policy in question is arbitrary or violative of any mandatory provisions of law. Unless the policy decision is inconsistent with the Constitution or the laws, the Court must exercise jurisdiction with circumspection. (Leaap Forwarders (P) Ltd. v. Commissioner of Central Excise and Customs, Guntur ( 2001 (3) ALD 216 (DB); Tata Iron and Steel Co.
Unless the policy decision is inconsistent with the Constitution or the laws, the Court must exercise jurisdiction with circumspection. (Leaap Forwarders (P) Ltd. v. Commissioner of Central Excise and Customs, Guntur ( 2001 (3) ALD 216 (DB); Tata Iron and Steel Co. Ltd. v. Union of India ( AIR 1996 SC 2462 ); Bennett Coleman & Co. v. Union of India (1972) 2 SCC 788 ). 36. The scope of judicial review of an executive policy is limited. The court cannot impinge upon the judgment of the executive as to the priorities. (State of H.P. v. Umed Ram Sharma (1986) 2 SCC 68 ). A policy decision can be interfered with by the Court only if such decision is shown to be patently arbitrary, discriminatory or malafide (State of M.P. v. Nandlal Jaiswal (1986) 4 SCC 566 ) or unreasonable. The concept of 'reasonableness' defies definition. The functional and conceptual implication of the term 'reasonableness' is that it is essentially another word used for public policy. (Om Prakash v. State Of Uttar Pradesh (2004) 3 SCC 402 ); Friedmann: 'Legal Theory, 4th Ed., at pages 83-85'). 37. Unless the policy or action is inconsistent with the Constitution and the laws or is arbitrary or irrational or is an abuse of power, the court will not interfere with such matters. (Federation of Railway Officers Association v. Union of India (2003) 4 SCC 289 ). There is a presumption that the governmental action is reasonable and in public interest, and it is for the party challenging its validity to show that it is wanting in reasonableness or is not informed with public interest. This burden is a heavy one and it has to be discharged to the satisfaction of the Court by proper and adequate material. The Court cannot lightly assume that the action taken by the Government is unreasonable or against public interest because there are large number of considerations which necessarily weigh with the Government in taking action. (Villianur Iyarkkai Padukappu Maiyam v. Union of India (2009) 7 SCC 561 ). 38. Public authorities must have liberty and freedom in framing policies. While the discretion is not absolute, unqualified, unfettered or uncanalised, and the judiciary has control over all executive actions, Courts are ill-equipped to deal with these matters.
(Villianur Iyarkkai Padukappu Maiyam v. Union of India (2009) 7 SCC 561 ). 38. Public authorities must have liberty and freedom in framing policies. While the discretion is not absolute, unqualified, unfettered or uncanalised, and the judiciary has control over all executive actions, Courts are ill-equipped to deal with these matters. In economic and commercial matters, decisions are taken by the government keeping in view several factors, and it is not possible for the Courts to consider competing claims and conflicting interests, and conclude which way the balance tilts. There are no objective, justiciable or manageable standards to judge the issues nor can such questions be decided on a priori considerations. (Dhampur Sugar (Kashipur) Ltd. v. State of Uttaranchal (2007) 8 SCC 418 ). The doctrine that powers must be exercised reasonably has to be reconciled with the no less important doctrine that the Court must not usurp the discretion of the public authority appointed to take the decision. Within the bounds of legal reasonableness is the area in which the deciding authority has genuinely free discretion. The Court must resist the temptation to draw the bounds too tightly, merely according to its own opinion. It must strive to apply an objective standard which leaves to the deciding authority the full range of choices. If the decision is within the confines of reasonableness, it is no part of the Court's function to look further into its merits. ‘With the question whether a particular policy is wise or foolish the Court is not concerned; it can only interfere if to pursue it is beyond the powers of the authority.” (Sterling Computers Ltd. (supra); Administrative Law, Prof. Wade). 39. While the submission that the Government could have ensured that quality eggs are supplied by traders also, if they were permitted to participate in the tender process and quote a lesser transport rate, cannot be brushed aside, it must be borne in mind that in economic matters every decision is necessarily empiric and is based on experimentation. Its validity cannot be tested on the application of any straitjacket formula. The Court must, while adjudging the constitutional validity of an executive policy relating to economic matters, grant a certain measure of freedom or ‘play in the joints’ to the executive. Mere errors of the government are not subject to judicial review. It is only its palpably arbitrary exercise which can be declared void.
The Court must, while adjudging the constitutional validity of an executive policy relating to economic matters, grant a certain measure of freedom or ‘play in the joints’ to the executive. Mere errors of the government are not subject to judicial review. It is only its palpably arbitrary exercise which can be declared void. The court cannot strike down a policy decision taken by the Government merely because it feels that another policy decision would have been fairer or wiser or more scientific or logical. (Dhampur Sugar (Kashipur) Ltd. (supra) Metropolis Theater Co. v. State of Chicago (57 l Ed 730: 228 US 61 (1912); Nandlal Jaiswal 58). The Government is entitled to make pragmatic adjustments and policy decisions as may be necessary or called for under the prevalent peculiar circumstances. 40. The Court cannot strike down a policy decision taken by the Government merely because it feels that another decision would have been fairer or wiser or more scientific or logical. A policy decision can be interfered with by the Court only if such a decision is shown to be patently arbitrary, discriminatory or malafide. (Ram Singh Vijay Pal Singh v. State of U.P. (2007) 6 SCC 44 ); Netai Bag v. State of W.B. (2000) 8 SCC 262 ); Nandlal Jaiswal (supra). 41. It is not for the Courts to examine the relative merits of different policies, and consider whether a wiser or better one can be evolved. Nor are Courts inclined to strike down a policy merely because it is urged that a different policy would have been fairer or wiser or more scientific or more logical. (BALCO Employees’ Union (Regd.) v. Union of India (2002) 2 SCC 333 ). It is not in the domain of the Court to embark upon the unchartered ocean of public policy. Greater judicial deference must be shown towards a policy relating to economic activities. The fact that an economic policy may be troubled by crudities, inequities, uncertainties or the possibility of abuse cannot form the basis for striking it down. (Natural Resources Allocation, In Re, Special Reference No.1 OF 2012 (2012) 10 SCC 1 ); R.K. Garg v. Union of India (1981) 4 SCC 675 ). The judiciary cannot engage in an exercise of comparative analysis of the fairness, logical or scientific basis, or wisdom of a policy.
(Natural Resources Allocation, In Re, Special Reference No.1 OF 2012 (2012) 10 SCC 1 ); R.K. Garg v. Union of India (1981) 4 SCC 675 ). The judiciary cannot engage in an exercise of comparative analysis of the fairness, logical or scientific basis, or wisdom of a policy. The wisdom and advisability of policies are, ordinarily, not amenable to judicial review unless the policies are contrary to statutory or constitutional provisions or is arbitrary or irrational or an abuse of power. (Natural Resources Allocation, In Re, Special Reference No.1 of 2012; Narmada Bachao Andolan (supra). The Court is not the forum where conflicting policy claims may be debated, as it is only required to adjudicate the legality of a measure which has little to do with the relative merits of different economic theories. (Natural Resources Allocation, In Re, Special Reference No.1 of 2012 (supra); Rustom Cavasjee Cooper (Banks Nationalisation) v. Union of India (1970) 1 SCC 248 ). 42. This Court would not, ordinarily, examine in judicial review proceedings under Article 226 of the Constitution of India, policy choices of the Executive. Policy is not static but is dynamic. (T.N. Education Deptt. Ministerial & General Subordinate Services Assn. v. State of T.N. (1980) 3 SCC 97 ). The Court is called upon to consider the validity of a public policy only when a challenge is made that such policy decision infringes the fundamental rights guaranteed by the Constitution of India or any other statutory right. (Premium Granites (supra). It is not within the scope of judicial review to embark upon an enquiry as to whether a particular public policy is wise or whether a better public policy can be evolved. The court cannot examine the relative merits of different policies and strike it down merely on ground that another policy would have been fairer and better. (Villianur Iyarkkai Padukappu Maiyam (supra). 43. If the policy cannot be faulted on grounds of malafides, unreasonableness, arbitrariness or unfairness, the mere fact that it would hurt business interests does not justify invalidating the policy. Courts should not express their opinion whether, at a particular point of time or in a particular situation, any such policy should have been adopted or not. It is best left to the discretion of the State. (Ugar Sugar Works Ltd. v. Delhi Admn. (2001) 3 SCC 635 ).
Courts should not express their opinion whether, at a particular point of time or in a particular situation, any such policy should have been adopted or not. It is best left to the discretion of the State. (Ugar Sugar Works Ltd. v. Delhi Admn. (2001) 3 SCC 635 ). No direction can be given or expected from the Court regarding the “correctness” of an executive policy unless, while implementing such policies, there is infringement or violation of any constitutional or statutory provision. (Ugar Sugar Works Ltd. (supra). The Court would not substitute its opinion for that of the policy makers, and would defer to the wisdom of those who are entrusted with the task of framing the policies. (Centre for Public Interest Litigation v. Union of India (2000) 8 SCC 606 ). 44. It is neither desirable nor advisable for the Court to direct or sermonise the Government to adopt a particular policy which it deems fit or proper, as it does not have effective means to decide which alternative, out of the many competing ones, is the best in the circumstances. (State of Jharkhand v. Ashok Kumar Dangi (2011) 13 SCC 383 ). In respect of public policies of the Government, the Court should not become the authority to accord approval. When two or more options or views are possible, and after considering them the Government takes a policy decision, it is then not the function of the Court to examine the matter afresh or sit in appeal over such a policy decision. (Narmada Bachao Andolan (supra); BALCO Employees’ Union (Regd.) (supra). 45. While the Court may even review the policy of the executive if it is clearly demonstrated that such policy is contrary to any statutory provision or the Constitution, it cannot consider the relative merits of different policies and decide for itself whether a wiser or a better policy can be evolved. (Statewide Recognized (RTA) Agents Welfare Association v. Govt. of A.P. ( 2003(3) ALD 212 (DB). 46. Article 14 cannot be interpreted in a doctrinaire or dogmatic manner. Excessive interference by the judiciary in the functions of the executive is not proper. In view of the inherent complexities involved in modern society, some free play must be given to the executive. (Transport and Dock Workers Union (supra); Missouri, Kansas and Texas Railway Co.
46. Article 14 cannot be interpreted in a doctrinaire or dogmatic manner. Excessive interference by the judiciary in the functions of the executive is not proper. In view of the inherent complexities involved in modern society, some free play must be given to the executive. (Transport and Dock Workers Union (supra); Missouri, Kansas and Texas Railway Co. v. May (48 L Ed 971); Aravali Golf Club v. Chander Hass (2008) 1 SCC 683 ). If a decision has been taken in a bonafide manner, although not strictly following the norms laid down by Courts, such decisions are upheld on the principle that Courts, while judging the validity of executive policy decisions, must grant certain measure of freedom or “play in the joints” to the executive. (Sterling Computers Ltd. (supra). The Government has, while taking a policy decision, the right to ‘trial and error’ as long as both trial and error are bonafide and within the limits of authority. (BALCO Employees' Union (Regd.) (supra); Netai Bag (supra); Ram Singh Vijay Pal Singh (supra). 47. It is not in dispute that this restriction on supply of eggs only by NECC registered poultry farmers without third party intervention has been made applicable uniformly to all ICDS centres in the State of Telangana. The mere fact that in schemes, other than the ICDS, eggs are being procured from traders also would not render the policy decision of the State Government, to procure eggs under the Integrated Child Development Scheme only from NECC registered poultry farmers, illegal. The Court would not strike down a policy merely because there is a variation. Consistency is not always a virtue. What is important is to know whether irrational and extraneous factor foul. (Tamil Nadu Education Deptt. Ministerial & General Subordinate Services Assn. (supra). There can be no quarrel if a policy is revised. The wisdom of yesterday may obsolesce into the folly of today, even as the science of old may sour into the superstition now, and vice versa. (Tamil Nadu Education Deptt. Ministerial & General Subordinate Services Assn. (supra). Reform must begin somewhere if it has to begin at all and, therefore, the administrator who has complex problems to solve must be allowed the freedom to proceed tentatively, step by step. (Triloki Nath Khosa (supra). 48. It is not for the Court to examine the merits or demerits of a policy.
Ministerial & General Subordinate Services Assn. (supra). Reform must begin somewhere if it has to begin at all and, therefore, the administrator who has complex problems to solve must be allowed the freedom to proceed tentatively, step by step. (Triloki Nath Khosa (supra). 48. It is not for the Court to examine the merits or demerits of a policy. (Maharashtra State Board of Secondary and Higher Secondary Education v. Paritosh Bhupeshkumar Sheth (1984) 4 SCC 27 ). The Court would not substitute its opinion for that of the Executive as to what policy would best serve the object or sit in judgment over the wisdom and effectiveness or otherwise of the policy merely on the ground that, in the view of the Court, the impugned policy will not help to serve the object. As long as the body, entrusted with the task of framing the policy, acts within the scope of the authority conferred on it, in the sense that the policy made by it has a rational nexus with the object, the Court would not concern itself with the wisdom or efficaciousness of such a policy. It is exclusively within the province of the Executive to determine, as a matter of policy, what measures would have to be incorporated in the policy for the efficacious achievement of the objects. It may be a wise policy which will effectuate the purpose or it may lack effectiveness calling for its revision and improvement. Any drawbacks in the policy will not render it ultra vires and the Court would not strike it down on the ground that, in its opinion, it is not a wise or prudent policy. (Paritosh Bhupeshkumar Sheth (supra). 49. Courts should be slow to interfere and must leave policy decisions to those who are more familiar with such problems than the Courts generally can be. (State of T.N. v. K. Shyam Sunder (2011) 8 SCC 737 ); University of Mysore v. C.D. Govinda Rao ( AIR 1965 SC 491 ); Neelima Misra v. Harinder Kaur Paintal ( AIR 1990 SC 1402 ); Victoria Memorial Hall v. Howrah Ganatantrik Nagrik Samity ( AIR 2010 SC 1285 ); Basavaiah (Dr.) v. Dr. H.L. Ramesh (2010) 8 SCC 372 ) and State of H.P. v. H.P. Nizi Vyavsayik Prishikshan Kendra Sangh (2011) 6 SCC 597 ).
H.L. Ramesh (2010) 8 SCC 372 ) and State of H.P. v. H.P. Nizi Vyavsayik Prishikshan Kendra Sangh (2011) 6 SCC 597 ). The Courts are not qualified to set their independent judgment on economic or commercial matters against that of the chosen State authorities. (Federal Power Commission (supra); Railroad Commission of Texas v. Rowan & Nichols Oil Company (311 US 570-577, 85 L. ed. 358,362). 50. Expertise in public matters is necessary before one may engage in the making, or in the criticism, of a policy. Courts do not possess the expertise and are, consequently, incompetent to pass judgment on the appropriateness or the adequacy of a particular policy. (Dhampur Sugar (Kashipur) Ltd. (supra); Liberty Oil Mills v. Union of India (1984) 3 SCC 465 ); 51. Federal Power Commission (supra). Matters of economic policy must necessarily be left to those with the necessary expertise as they often are matters of prediction of ultimate results on which even experts can seriously err and, doubtlessly, differ. (Natural Resources Allocation, In Re, Special Reference No.1 of 2012 (supra); BALCO Employees’ Union (Regd.); Peerless General Finance and Investment Co. Ltd. v. Reserve Bank of India (1992) 2 SCC 343 ); M/s. Prag Ice Oil Mills v. Union of India (1978) 3 SCC 459 ). Due respect should be given to the wisdom of those who are entrusted with the task of framing policies. (Centre for Public Interest Litigation (supra). 52. While price is undoubtedly a relevant factor for awarding contracts, it need not necessarily be the sole criterion. In the present case, the laudable object is to serve farm fresh eggs within time to the beneficiaries of the Integrated Child Development Scheme, and thereby prevent infant and maternal mortality, reduce incidence of anaemia and malnutrition among pregnant women and lactating mothers, and of low birth weight babies. To achieve this object the Government believes that, among others, timely supply of farm fresh eggs should be ensured. Proximity of poultry farms to the centre is considered a means of achieving this object.
To achieve this object the Government believes that, among others, timely supply of farm fresh eggs should be ensured. Proximity of poultry farms to the centre is considered a means of achieving this object. The submission that such supplies can be effected at a lower cost only if poultry farmers have adequate transport facilities to ensure timely supply of eggs to the ICDS centres, and it cannot be said with certainty that traders with adequate transport facilities would not be able to supply quality eggs at a lower transport cost, cannot be said to be without merit. The fact, however, remains that the object of the entire exercise is only to procure farm fresh eggs, and to ensure its supply within time. This object can be achieved if eggs are procured from poultry farmers who have the wherewithal to supply the eggs, from their farms, within time. While this can possibly be achieved by procuring supplies from traders also, these are policy choices of the Government and, even if the view expressed by Sri D. Prakash Reddy, Learned Senior Counsel, is taken to be a possible view, no interference would be called for as the policy decision of the State Government does not offend the provisions of the Constitution including Part III thereof. 54. As this Court, in proceedings under Article 226 of the Constitution of India, would not make a comparative evaluation of the merits and demerits of the policy decision of the Government, or examine whether the interests of the beneficiaries under the ICDS would have been better served by permitting traders also to participate in the tender process, the challenge to the validity of the impugned tender notification, the policy decision of the Government in G.O.Ms.No.12 dated 26.11.2014, and the orders issued by the Government in memos dated 09.12.2014 and 17.12.2014, in implementing the policy decision of the Government in G.O.Ms. No.12 dated 26.11.2014, do not necessitate interference. 55. The Writ Petition fails and is, accordingly, dismissed. The Writ Appeal is allowed. Miscellaneous Petitions, if any, pending shall also stand disposed of. No costs.