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Himachal Pradesh High Court · body

2017 DIGILAW 1236 (HP)

RSR Private Limited v. State of H. P.

2017-11-08

SANDEEP SHARMA, SANJAY KAROL

body2017
JUDGMENT : Sandeep Sharma, J. 1. Petitioner-firm being aggrieved with action of respondents inasmuch as not awarding it rate contract with respect to purchase of Plant Protection Equipments (A) (Foot, Hand Compression and Knapsack, Sprayer etc.) for the year 2017-2018 despite its being lowest and successful bidder and also with the issuance of communication dated 29.4.2017 (Annexure P-10) issued by respondent No. 2, cancelling all the tenders, approached this Court by way of instant Civil Writ Petition, seeking therein direction to respondents to award rate contract with respect to aforesaid items for the year 2017-18 and to hold a fair and impartial inquiry with regard to unnecessary delay caused and attempts made by official of respondent No. 2 to oust/debar the petitioner from the tender process with mala-fide intention and for the extraneous reasons. 2. Before adverting to the factual matrix of the case, it may be noticed that this Court, after having taken note of pleadings available on record as well as original record pertaining to tender process initiated by respondent No. 2 for the purchase of Plant Protection Equipments, had passed detailed judgment on 13.9.2017, wherein this Court, after having noticed certain omissions and inaction on the part of competent authority while dealing with the tender submitted by the petitioner, concluded that it would have exercised power under Article 226 of the Constitution of India to undo the wrong committed by the respondent authority, but, taking note of the fact that pursuant to decision dated 22nd April, 2017, respondent-Corporation has already issued fresh tender, deems it fit to restrain itself from passing any stringent order. 3. Subsequent to passing of judgment dated 13.9.2017, whereby petition having been preferred by the petitioner herein was disposed of with the direction to respondents to act judiciously while examining/analyzing tenders submitted by various parties including petitioner pursuant to fresh advertisement issued by the Department, Review Petition being No. 81 of 2017 came to be filed on behalf of the present petitioner, seeking therein review and recall of judgment dated 13.9.2017 for the reasons stated in the review petition. 4. Petitioner in the review petition claimed that there is error apparent on the face of the judgment, which has ultimately prevented this Court from quashing the decision and further prevented it from ordering the allotment of tender in favour of the petitioner. 4. Petitioner in the review petition claimed that there is error apparent on the face of the judgment, which has ultimately prevented this Court from quashing the decision and further prevented it from ordering the allotment of tender in favour of the petitioner. While referring to paras 16 and 17 of the judgment dated 13.9.2017, petitioner claimed in review petition that this Court disposed of writ petition on the pretext that pursuant to order dated 22nd April, 2017 issued by Managing Director, H.P. Agro Industries Corporation, wherein it had taken decision to cancel all the tenders of Plant Protection Equipments, respondent No. 2 issued fresh notice inviting tender in newspaper i.e. in “The Hindustan Times” (Delhi Edition) and in “Amar Ujala” (Chandigarh Edition), on 28th May, 2017, wherein rate contract for supply of Pesticides, Plant Protection Equipments and Micronutrients for Annual Rate Contract for the year 2017-18, were again invited. 5. In this background, review petitioner, while referring to findings returned by this Court in para 39 of judgment dated 13.9.2017, contended that this Court would have proceeded to undo the wrongs committed by respondents-authorities, had the factum with regard to non issuance of fresh notice inviting tender in newspaper on 28th May, 2017 been correctly recorded in paras 16 and 17 of the judgment. 6. This Court, taking note of grounds contained in the review petition, summoned the original record and after having perused the same found that there is error apparent on the face of the judgment inasmuch as no fresh tenders were issued by the respondent pursuant to decision/communication dated 22nd/29th April, 2017 that of Managing Director, H.P. Agro Industries Corporation Limited, which fact was got erroneously recorded in para-16 of the judgment in question. Accordingly, this Court, while allowing review petition having been preferred by the petitioner herein came to the conclusion that recording of aforesaid fact heavily weighed with the Court while declining relief claimed in the writ petition and accordingly recalled impugned judgment dated 13.9.2017 passed in the instant Civil Writ Petition. On same day i.e. on 12.10.2017, this Court re-heard the parties and reserved the judgment. 7. For having bird’s eye view, facts sans unnecessary details, which may be relevant for adjudication of present case are that respondent No. 2 invited tenders for purchase of Plant Protection Equipments (A) (Foot, Hand Compression and Knapsack, Sprayer etc.) for the Departments of Horticulture, Agriculture etc. 7. For having bird’s eye view, facts sans unnecessary details, which may be relevant for adjudication of present case are that respondent No. 2 invited tenders for purchase of Plant Protection Equipments (A) (Foot, Hand Compression and Knapsack, Sprayer etc.) for the Departments of Horticulture, Agriculture etc. Himachal Pradesh for the year 2017-2018 by advertising Notice Inviting Tender (for short ‘NIT’) in Hindustan Times (Delhi Edition) on 2nd February, 2017. Petitioner-firm, who claimed itself to be authorized manufacturer of the Plant Protection Equipments, qua which tenders were issued/invited, submitted tender document (Annexure P-2). As per terms and conditions contained in tender form (Annexure P-3), tender was to be opened on 23rd February, 2017 at 3.30 P.M. 8. Careful perusal of record suggests that tenders submitted by the petitioner as well as other tenderers were opened on 23rd February, 2017. As per petitioner, its tender was found to be lowest amongst other nine bidders and as such he was legitimately expecting that rate contract in terms of Tender Notice would be awarded to it on or before 31st March, 2017, since, till that date, there was already rate contract in operation. As per petitioner, on 23rd February, 2017, simultaneously other tenders pertaining to altogether different works were also processed and opened by the same Tenders Opening Committee (for short ‘TOC’) who after opening the same out rightly rejected one tender for want of earnest money, whereas, in the case of present tender, all tenders were found in order and as such after conclusion of meeting, ‘TOC’ apprised the petitioner that he would be awarded tender/rate contract with respect to the present tender on or before expiry of previous tenders i.e. 31st March, 2017. Petitioner has further alleged that respondents instead of awarding work to it despite being lowest tenderer, decided to convene a meeting of Technical Scrutiny Sub Committee (for short ‘TSSC’), having four members including one person, who was also a Member of TOC’ i.e. respondent No. 3. As per petitioner ‘TSSC’ was otherwise required to call the present petitioner for negotiation and thereafter award the rate contract, but, Committee, referred above, without associating the petitioner convened the meeting. However, fact remains that the Committee, as referred above, did not take any decision with regard to awarding of work to the petitioner-firm, as a result of which it was compelled to file various representations vide Annexures P-4 to P-8. However, fact remains that the Committee, as referred above, did not take any decision with regard to awarding of work to the petitioner-firm, as a result of which it was compelled to file various representations vide Annexures P-4 to P-8. Since no action, if any, was taken by the Authorities concerned, pursuant to aforesaid representations sent by the petitioner, petitioner vide Annexure P-9 got legal notice served upon the respondents, calling upon them to award work to it being the lowest bidder. In the aforesaid background, petitioner alleging mala-fide or inaction on the part of respondents in not awarding it work despite its being lowest bidder, approached this Court by way of instant petition on 2nd May, 2017. 9. During the pendency of petition, referred above, communication dated 29th April, 2017 (Annexure P-10) came to be issued by respondent, cancelling therein tenders in question, as a consequence of which petitioner amended its writ petition after obtaining necessary permission of the Court. By way of amendment, petitioner, apart from other reliefs, also sought quashing of communication dated 29th April, 2017. 10. Mr. Sanjeev Bhushan, learned Senior Counsel representing the petitioner-firm, while inviting the attention of this Court to the communication dated 29th April, 2017, whereby tender in question came to be cancelled, strenuously argued that after opening of tenders by ‘TOC’ on 23rd February, 2017, there was no scope left for ‘TSSC’ to reject the tender submitted by the petitioner on the ground mentioned in the communication referred above. While alleging mala-fide and biasness on the part of Member of ‘TOC’ Mr. Bhushan, strenuously argued that respondent No. 3, who happened to be a Member of ‘TOC’ was hell bent in ousting the petitioner from tendering process to favour another firm, which was at number two. Learned Senior Counsel further contended that since petitioner-firm highlighted irregularities committed by the office of Corporation while rejecting the valid tender of the petitioner, respondents without there being valid and just reason decided to cancel the tender. 11. Mr. Sanjeev Bhushan, learned Senior Counsel, while inviting the attention of this Court to condition No. 4, as contained in tender form (Annexure P-3), contended that all cuttings/ corrections, if any, in tender document were required to be signed/initialled by the tenderers and as such it cannot be said that if there were cuttings and corrections in the tender document, it was to be rejected out rightly. Learned Senior Counsel also made this Court to travel through tender form filled up by the petitioner to demonstrate that cuttings made in the tender document were duly initialed and signed by the representative of the petitioner-firm and as such there was no occasion for ‘TSSC’ to reject its tender. While referring to the noting given by one of the Member of the ‘TSSC’ as stands mentioned in communication dated 29th April, 2017 (Annexure P-10) learned Senior Counsel contended that it stands duly proved on record that the cuttings made in the tender were duly attested by the authorized representative of the petitioner-firm. Learned Senior Counsel further contended that Authorities before proceeding to place matter before ‘TSSC’ invited another bidders/tenderers for negotiation, whose rates were definitely higher than the petitioner, which action of respondents itself smacks of extraneous consideration. Learned Senior Counsel, while referring to documents available on record, further stated that it is quite apparent from the conduct of the officers of respondent- Corporation i.e. respondents No. 4 and 5, that they left no stone unturned to oust the petitioner-firm that too with a view to accommodate another firm and tried their best to impress upon the authorities that there is/was illegality in the tender submitted by the petitioner-firm. Respondents No. 4 and 5, solely with a view to ensure ouster of petitioner, presented altogether false story before the management, who ultimately decided to cancel the tender. 12. Mr. Onkar Jairath, learned counsel representing respondents No. 2 to 5, while inviting the attention of this Court to the reply having been filed on behalf of respondents No. 2 and 3, seriously disputed the contents contained in the petition as well as arguments advanced by learned Senior Counsel representing the petitioner. Mr. Jairath contended that the petitioner has not approached this Court with clean hands; rather an attempt has been made to conceal the material facts. Mr. Jairath contended that since there were major cuttings and over-writings in the tender form, submitted by the petitioner, he could not be awarded contract for supply of Plant Protection Equipment (Sprayer) in question. While referring to conditions No. 4 and 9 of the tender document, Mr. Mr. Jairath contended that since there were major cuttings and over-writings in the tender form, submitted by the petitioner, he could not be awarded contract for supply of Plant Protection Equipment (Sprayer) in question. While referring to conditions No. 4 and 9 of the tender document, Mr. Jairath contended that rates and units were not required to be over written and as per terms and conditions, it was not permissible that rates and units are over-written and as such authorities rightly not considered the rates offered by the petitioner-firm. 13. Learned counsel further contended that perusal of tender submitted by the petitioner- firm clearly reveals that neither petitioner-firm nor its authorized representative ever properly signed the cuttings/corrections in the tender form. There is no infirmity and illegality in the decision of the Committee to reject the tender submitted by the petitioner. Learned counsel also disputed that tender submitted by the petitioner was finally accepted and he was declared to be the lowest bidder. As per Mr. Jairath, ‘TOC’ after having opened the tender on 23rd February, 2017, only announced/read-over the rates quoted by the parties in front of all the bidders and their representatives, but at no point of time, work was ordered to be awarded in favour of present petitioner. Learned counsel further contended that ‘TOC’ after having noticed major cuttings and over-writings on rates and units quoted in the tender document of the petitioner submitted the tender to ‘TSSC’ for further examination. Lastly, Mr. Jairath contended that during the pendency of present petition, Authority concerned has decided to cancel the tender so that transparency is maintained while awarding the rate contract and as such the present petition deserves to be dismissed having rendered infructuous. 14. We have heard learned counsel for the parties and gone through the record. 15. As has been noticed above that this Court, after having taken note of nature of dispute interse parties, deemed it fit to summon the original record pertaining to tender in question, which was made available during final arguments. Perusal of pleadings vis-a-vis record suggests that the petitioner amongst other bidders submitted its tender for the purchase of Plant Protection Equipments for the Department of Horticulture and Agriculture etc. on annual rate contract basis for the year 2017-18. Perusal of pleadings vis-a-vis record suggests that the petitioner amongst other bidders submitted its tender for the purchase of Plant Protection Equipments for the Department of Horticulture and Agriculture etc. on annual rate contract basis for the year 2017-18. It is also not in dispute that tenders submitted by various parties including the petitioner-firm came to be opened as per the terms and conditions contained in the tender form on 23rd February, 2017. 16. This Court further, with a view to ascertain the correctness of submission made by the learned Senior Counsel representing the petitioner that rates submitted by the petitioner- firm were found to be lowest and they were declared eligible being lowest, carefully perused the record including notings, perusal whereof suggests that tenders were opened by the ‘TOC’ on 22nd and 23rd February, 2017, where-after comparative statement was prepared and decision was taken to call the meeting of ‘TSSC’ on 16th and 17th March, 2017 for evaluation of statement/tenders. But, definitely there is no mention, as such, in the record with regard to petitioner-firm having found lowest bidder. 17. Proceedings of the meeting of ‘TOC’ held on 22nd and 23rd February, 2017 for opening tenders invited for rate contract of Pesticides, Plant Protection Equipment, Bio-Fertilizers and Organic Fertilizer, reveal that Committee, after having opened all nine tenders received for ‘Sprayers’ announced the rate in front of parties/their representatives. However, while preparing comparative statement, it was noticed that M/s. RSR Retail Pvt. Ltd. Nodia (UP), petitioner herein, had made cuttings in the rates quoted by it for item code Nos. 10017, 10018, 10019, 10020 and 10020A, accordingly Committee, taking note of condition No. 4 of the tender document, submitted all tenders alongwith the proceedings to the ‘TSSC’ for examination and for further recommendations. 18. Perusal of decision, as taken by ‘TSSC’ in its meeting held on 16th/17th March, 2017 suggests that Committee, after having noticed cuttings/over-writing made in the tender documents submitted by petitioner decided not to call the parties as far as tender for Plant Protection Equipment (Sprayers) is concerned and decided to place the matter before the management for appropriate decision. Notings, as referred at N-43-44 in the record of the Department, are contrary to minutes/recommendations of ‘TSSC’ held on 16th/17th March, 2017. Notings, as referred at N-43-44 in the record of the Department, are contrary to minutes/recommendations of ‘TSSC’ held on 16th/17th March, 2017. Minutes of meeting of ‘TSSC’ as have been taken note above nowhere suggest that decision was taken by ‘TSSC’ to cancel the tender of petitioner-firm, rather Committee, taking note of cuttings in the rates quoted by the petitioner qua certain items decided not to call all the parties of Plant Protection Equipment (Sprayers) and resolved to place the matter before management for appropriate decision. Whereas, noting at N-47-48 on the record suggests that ‘TSSC’ in its meeting after having noticed cuttings/overwriting in the tender submitted by the petitioner decided to reject the tender of petitioner and to maintain transparency called L-II i.e. M/s. Hymark Agritech Pvt. Ltd. Noida, (UP) for negotiations. Though there is mention in the record, as noticed above, that decision was taken by the Committee to call L-II for negotiations, but noting given at N-44 to N-53 clearly suggests that none was called for negotiations, rather matter was placed before the Competent Authority, who further advised to seek legal opinion from the standing counsel of the Corporation vide order dated 7th April, 2017. It also emerge from the record that on 11th April, 2017, standing counsel of respondent-Corporation opined as under:- “There are few cuttings which have been made by the tenderer. The amount which have been shown in figures have rightly been shown in the words. Moreover, as per the requirement of the condition No. 4 of the tender form the cuttings made in the tender form should be duly signed by the tenderer. In the present tender form the cuttings have been duly signed by the tenderer. In my opinion the cuttings made there in the tender are not material. These are duly signed as required by the terms and conditions of the tender.” 19. In the present tender form the cuttings have been duly signed by the tenderer. In my opinion the cuttings made there in the tender are not material. These are duly signed as required by the terms and conditions of the tender.” 19. It also emerge from the record that on 22nd April, 2017, Managing Director of Himachal Pradesh Agro Industries Corporation, after having taken note of legal opinion rendered by standing counsel, proceeded to pass following orders:- “After going through the tender notice, tender documents, proceedings of the Tender Opening Committee, Technical Scrutiny Sub Committee and Legal Opinion, it has been observed that there are different opinion with regard to the tender of M/s RSR Retain Pvt. Ltd. Noida due to which it is difficult to come to any conclusion at this stage. In the absence of any clear and specific recommendations by the Sub Committee, the under signed is left with no option but to cancel all the tenders of Plant Protection Equipment [Item Code No. AIC-0021(A)].” Pursuant to aforesaid decision taken by Managing Director of the Corporation, fresh proposal was initiated to re-tender the left out items. 20. Though perusal of the record suggests that there are/were cuttings/over writings qua certain items in the tender document submitted by the petitioner-firm, but those appeared to have been initialed and signed by the representative of the petitioner-firm. Otherwise also, condition No. 4, as contained in tender document, which is reproduced herein-below clearly provides that all cuttings/corrections must be signed by tenderers. Any omission in filling the columns of units and rates may debar a quotation, meaning thereby that the tender cannot be rejected on the ground of cuttings/corrections, if the same are signed and initialed by the bidder or its representative. Though perusal of condition No. 4, as contained in tender document, suggests that the ‘TOC’ is/was empowered to out rightly reject such quotation/tender submitted by the bidder, but, needless to say such power cannot be exercised arbitrarily, rather power, if any, in this regard is expected to be exercised judiciously. “4. All the columns of the quotations (Schedule-A) form shall be duly properly and exhaustively filled in. The rates and units shall not be over written. Quotations shall always be both in figures and words. The words “No quotation” should be written across the items in the schedule for which a tenderer does not wish to tender. “4. All the columns of the quotations (Schedule-A) form shall be duly properly and exhaustively filled in. The rates and units shall not be over written. Quotations shall always be both in figures and words. The words “No quotation” should be written across the items in the schedule for which a tenderer does not wish to tender. All cuttings/corrections must be signed by the tenderers. Any omission in filling the columns of units and rates may debar a quotation, the tender opening committee is empowered to out rightly reject such quotation/tender. 9. The HP Agro Industries Corporation Ltd. reserves the right of rejection/approval of all or any of the tenders without assigning any reasons thereto and reserves that right to negotiate with any of the tenderers where deemed necessary and to award parallel rate contract to any or all of the participating tenderers.” 21. It also emerge from the record that one of the Member of ‘TSSC’ categorically opined that cuttings/over writing, as allegedly made in tender document submitted by the petitioner, are not material as same have been signed/initialed by the representative of petitioner-firm. 22. At this stage, it may be noticed that it also emerge from the record that there are contradictions in the notings prepared by concerned officers/officials for the perusal of competent Authority vis-a-vis actual proceedings/recommendations of ‘TSSC’ who held its meeting on 16th/17th March, 2017 for finalizing the rate contract of Pesticides, Micronutrients, Plant Protection Equipment, Bio-Fertilizers and Organic Fertilizer. This Court was unable to lay its hand to any document suggestive of the fact that after decision of ‘TSSC’ second lowest firm was ever called for negotiations as far as rate contract/tender for purchase of Plant Protection Equipment is concerned. No doubt, officials of respondent-Corporation had recorded that since tender of petitioner-firm has been rejected, Committee has decided to call M/s. Hymark Agritech Pvt. Ltd. Noida, (UP) to maintain transparency. Definitely, aforesaid noting in the record is contrary to the actual recommendations/minutes of meeting of the Committee held on 16th 17th March, 2017, wherein decision was taken not to call any of tenderer as far as tender for purchase of Plant Protection Equipment is concerned. 23. Definitely, aforesaid noting in the record is contrary to the actual recommendations/minutes of meeting of the Committee held on 16th 17th March, 2017, wherein decision was taken not to call any of tenderer as far as tender for purchase of Plant Protection Equipment is concerned. 23. This Court, after having taken note of condition No. 4, as contained in tender document, has no hesitation to conclude that authorities responsible for scrutiny of tender document wrongly arrived at conclusion that in view of over-writings and cuttings made in tender document, which were duly initialed and signed by the representative of petitioner-firm, tender submitted by the petitioner deserves to be rejected. This is none of the case of respondents that cuttings/over writings were not initialed and signed by the representative of the petitioner-firm and as such there appears to be considerable force in the contention of learned Senior Counsel representing the petitioner-firm that frivolous objections were raised by the Members of Committee to oust the petitioner-firm, whose rates were admittedly lowest. There is no denial, as such, on the part of respondents that rates offered by the petitioner-firm were not lowest as compared to the other tenderers. 24. After having carefully gone through the record as well as conditions contained in tender document, it can safely be inferred that decision taken by the respondent in cancelling the tender was taken in hot haste manner because admittedly there is no plausible/reasonable explanation available on record with regard to rejection of tender submitted by the petitioner-firm. Perusal of notings given in the record, which are admittedly contrary to the actual proceedings of meeting of “TSSC” held on 16th and 17th March, 2017, compels this Court to agree with the contention of learned Senior Counsel representing the petitioner that there is an attempt on the part of officials of respondent- Corporation to persuade competent Authority/concerned quarters to reject the tender submitted by the petitioner and thereafter offer the tender to second lowest bidder, but that may not be sufficient for this Court to conclude that there was mala-fide against the petitioner-firm. The competent Authority, who ultimately decided to cancel the tender in question, has nowhere assigned reason, if any, on record to differ with opinion rendered by one of the Member of the ‘TSSC’ as well as standing counsel of Corporation, who after having taken note of term No. 4 of tender document, categorically opined that there is no material defect in the tender submitted by the petitioner-firm. After having carefully perused notings given at N/60-61, this Court is compelled to conclude that Authority, who ultimately decided to cancel the tender, had no valid reason to cancel the tender of petitioner-firm and its order of cancellation dated 22nd April, 2017 is without application of mind. 25. Having gone through the record vis-a-vis tender submitted by the petitioner, we are unable to accept aforesaid conclusion drawn by the competent authority as far as his observation that there are different opinions with regard to tender of M/s. RSR Pvt. Ltd. As has been taken note above, there are two opinions available on file, one is given by standing counsel of the Corporation and one by the Members of the Committee, where they have unequivocally stated that there is no defect in the tender of the petitioner. Apart from aforesaid two opinions, this Court could not lay its hand to opinion, if any, rendered by any Authority, be it ‘TOC’ and ‘TSSC’ with regard to validity of tender document submitted by the petitioner-firm. 26. It is well settled by now that the Courts would normally not interfere in the tender/ contractual matters while exercising powers of judicial review. Power of judicial review can only be exercised by constitutional Courts, if it is proved on record that process adopted or decision so made by the Authorities is intended to favour someone or the Authority has acted with mala-fide or decision made is so arbitrary and irrational that no responsible authority acting reasonably could have reached. Needless to say that Court can also exercise power of judicial review in case it is shown that public interest is affected. In this regard, reliance is placed upon judgment rendered by Hon'ble Apex Court in Tata Cellular vs. Union of India, (1994) 6 SCC 651 . 27. Needless to say that Court can also exercise power of judicial review in case it is shown that public interest is affected. In this regard, reliance is placed upon judgment rendered by Hon'ble Apex Court in Tata Cellular vs. Union of India, (1994) 6 SCC 651 . 27. Hon'ble Apex Court in Air India Ltd. vs. Cochin International Airport Ltd. (2000) 2 SCC 617 held that even when some defect is found in the decision-making process, the Court must exercise its discretionary power under Article 226 with great caution and should exercise it only in furtherance of public interest and not merely on the making out of a legal point. The Court should always keep the larger public interest in mind in order to decide whether its intervention is called for or not. Only when it comes to a conclusion that overwhelming public interest requires interference, the Court should intervene. 28. Hon'ble Apex Court, in Michigan Rubber (India) Limited vs. State of Karnataka and Others, (2012) 8 SCC 216 , while discussing power of an authority in setting up terms and conditions of a tender, has specifically held that the Government undertakings should have a free hand while framing terms and conditions and Courts should only interfere in case there is material on record to demonstrate that same are arbitrary, discriminatory, mala-fide or actuated by bias. The Hon'ble Apex Court has held as under: “35.........As noted in various decisions, the Government and their undertakings must have a free hand in setting terms of the tender and only if it is arbitrary, discriminatory, mala- fide or actuated by bias, the courts would interfere. The courts cannot interfere with the terms of the tender prescribed by the Government because it feels that some other terms in the tender would have been fair, wiser or logical..........” 29. Hon’ble Apex Court in Master Marine Services (P) Ltd. vs. Metlalfe & Hodkinson (P) Ltd. and Another, (2005) 6 SCC 138 again reiterated the principles that (a) State can choose its own method to arrive at a decision; (b) State and its instrumentalities have duty to be fair to all concerned; (c) even when some defect is found in decision making process, Court must exercise its extra ordinary writ jurisdiction with great caution and that too in furtherance of public interest. 30. 30. The Apex Court in Jagdish Mandal vs. State of Orissa and Others, (2007) 14 SCC 517, reiterated the aforesaid principles by stating that before interfering in a tender and contractual matter, in exercise of its power of judicial review, Court should pose itself the following question:- “(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.” 31. Recently, Hon'ble Apex Court in Reliance Telecom Ltd. and Another vs. Union of India and Another, 2017 SCC On Line 36 has specifically held that the condition to put a cap and make a classification not allowing certain entities to bid is not an arbitrary one as it is based on the acceptable rationale of serving the cause of public interest. Hon'ble Apex Court has further held that aforesaid exercise allows new entrants and enable the existing entities to increase their cap to make the service more efficient. Moreover, the Court cannot get and dwell as an appellate authority into complex economic issues on the foundation of competitors advancing the contention that they were not allowed to bid in certain spheres. Hon'ble Apex Court, in the aforesaid case has further approved the action of the authorities concerned, who put stringent conditions to ensure competition in the market by preventing large/big operators from acquiring large amount of spectrum. The Hon'ble Apex Court held as under: “33. The objective behind Spectrum capping is to ensure competition in the market by preventing large/big operators from acquiring large amount of spectrum, which they may not require but only hoard to prevent the small operators from effectively competing in the market, and that is why, TRAI has recommended on 02.07.2015 that the basic objective of prescribing a spectrum cap is to prevent a TSP from acquiring large holdings of spectrum through auction, M&A or trading, as it may lead to non-level playing field thereby disturbing the competition in the market. It cannot be left to the market forces alone to decide the maximum spectrum holding as a TSP and, hence, the provision of cap should continue on the spectrum holding that a TSP may acquire or otherwise. It cannot be left to the market forces alone to decide the maximum spectrum holding as a TSP and, hence, the provision of cap should continue on the spectrum holding that a TSP may acquire or otherwise. The argument that the respondent should have notionally included the spectrum surrendered by BSNL/MTNL would result in creating a situation where though the spectrum put to auction remains the same (i.e. limited), yet a large/big player will be able to bid for the entire spectrum (which it otherwise could not have done due to Clause 5.3.1.) thereby effectively giving a tool to the large/big operators to deprive/starve small operators, who quite avowedly, cannot match the buying power of larger operators of spectrum. 78. We have already discussed that the condition to put a cap and make a classification not allowing certain entities to bid is not an arbitrary one as it is based on the acceptable rationale of serving the cause of public interest. It allowed new entrants and enabled the existing entities to increase their cap to make the service more efficient. The Court cannot get and dwell as an appellate authority into complex economic issues on the foundation of competitors advancing the contention that they were not allowed to bid in certain spheres. As the stipulation in the tender was reasonable and not based on any extraneous considerations, the Court cannot interfere in the NIA in exercise of the power of judicial review. The contention is that the State cannot hoard the spectrum as per the 2G case. We are disposed to think that in the case at hand, it cannot be said that there has been hoarding. The directions given in the 2G case had been complied with and the auctions have been held thereafter from the year to year. The feasibility of communication, generation of revenue and its maximization and sub-serving of public interest are to be kept in view. The explanation given by the Union of India for not putting the entire spectrum to auction is a reasonable one and it is put forth that an endeavour would be made to put it to auction when it becomes available in sufficient quantum. The Court cannot interfere with eth tender conditions only on the ground that certain amount of spectrum has not been put to auction. The Court cannot interfere with eth tender conditions only on the ground that certain amount of spectrum has not been put to auction. The submission is that whatever has been put to auction and is available should have been notionally added so that the entities which have certain quantum of spectrum in praesenti could have participated in the auction and put forth their bids for a higher quantum. This argument may look attractive on a first blush but pales into insignificance on a studied scrutiny. As is evincible, one of the petitioners had earlier more than 65 MHz in a bad and because of the limited auction and non-addition of available spectrum on notional basis, it has obtained less quantum. With this submission, the contention of legitimate expectation has been associated. We have already repelled the submission pertaining to legitimate expectation. If there has been a reduction for a particular entity because of the terms and conditions of the tender, it has to accept it, for he cannot agitate a grievance that he could have obtained more had everything been added notionally. Notionally adding up or not adding up, we think, is a matter of policy and that too a commercial policy and in a commercial transaction, a decision has to be taken as prudence would command. In this regard, reference to the decision in Asia Foundation & Construction Ltd. vs. Trafalgar House Construction (I) Ltd. would be apt. In the said case, the Court referred to the authority in Tata Cellular (supra) and thereafter opined that though the principle of judicial review cannot be denied so far as exercise of contractual powers of government bodies are concerned, but it is intended to prevent arbitrariness or favouritism and it is exercised I the larger public interest or if it is brought to the notice of the court that in the matter of award of a contract power has been exercised for any collateral purpose. In the instant case, we are unable to perceive any arbitrariness or favouritism or exercise of power for any collateral purpose in the NIA. In the absence of the same, to exercise the power of judicial review is not warranted. In the case at hand, we think, it is a prudent decision once there is increase of revenue and expansion of the range of service.” 32. In the absence of the same, to exercise the power of judicial review is not warranted. In the case at hand, we think, it is a prudent decision once there is increase of revenue and expansion of the range of service.” 32. The Apex Court in State of Jharkhand vs. M/s. CWE-SOMA Consortium, AIR 2016 SCW 3366, has held that the State derives its power to enter into a contract under Article 298 of the Constitution of India and has the right to decide whether to enter into a contract with a person or not subject only to the requirement of reasonableness under Article 14 of the Constitution of India. Apex Court held as under: “13. The appellant-state was well within its rights to reject the bid without assigning any reason thereof. This is apparent from clause 24 of NIT and clause 32.1 of SBD which reads as under:- “Clause 24 of NIT: Authority reserves the right to reject any or all of the tenders received without assigning any reason thereof. Clause 32.1 of SBD: The Employer reserves the right to accept or reject any Bid to cancel the bidding process and reject all bids, at any time prior to award of Contract, without thereby incurring any liability to the affected Bidder or Bidders or any obligation to inform the affected Bidder or Bidders of the grounds for the Employer’s action.” In terms of the above clause 24 of NIT and clause 32.1 of SBD, though Government has the right to cancel the tender without assigning any reason, appellant-state did assign a cogent and acceptable reason of lack of adequate competition to cancel the tender and invite a fresh tender. The High Court, in our view, did not keep in view the above clauses and right of the government to cancel the tender. 14. The State derives its power to enter into a contract under Article 298 of the Constitution of India and has the right to decide whether to enter into a contract with a person or not subject only to the requirement of reasonableness under Article 14 of the Constitution of India. In the case in hand, in view of lack of real competition, the state found it advisable not to proceed with the tender with only one responsive bid available before it. In the case in hand, in view of lack of real competition, the state found it advisable not to proceed with the tender with only one responsive bid available before it. When there was only one tenderer, in order to make the tender more competitive, the tender committee decided to cancel the tender and invited a fresh tender and the decision of the appellant did not suffer from any arbitrariness or unreasonableness.” 33. The Apex Court in Central Coalfields Limited vs. SLL-SML (Joint Venture Consortium), AIR 2016 SCW 3814, has further held that Court can go into the question of mala-fides raised by a litigant, but in order to succeed, much more than a mere allegation is required. Bald and unfounded allegations of mala-fides are not sustainable and that mala-fides must be specifically pleaded and proved. Hon'ble Apex Court has held as under: “44. On asking these questions in the present appeals, it is more than apparent that the decision taken by CCL to adhere to the terms and conditions of the NIT and the GTC was certainly not irrational in any manner whatsoever or intended to favour anyone. The decision was lawful and not unsound. 55. On the basis of the available case law, we are of the view that since CCL had not relaxed or deviated from the requirement of furnishing a bank guarantee in the prescribed format, in so far as the present appeals are concerned every bidder was obliged to adhere to the prescribed format of the bank guarantee. Consequently, the failure of JVC to furnish the bank guarantee in the prescribed format was sufficient reason for CCL to reject its bid. 56. There is nothing to indicate that the process by which the decision was taken by CCL that the bank guarantee furnished by JVC ought to be rejected was flawed in any manner whatsoever. Similarly, there is nothing to indicate that the decision taken by CCL to reject the bank guarantee furnished by JVC and to adhere to the requirements of the NIT and the GTC was arbitrary or unreasonable or perverse in any manner whatsoever.” 34. By now it is settled law that burden of proving mala-fides is on the person making allegations and burden is very heavy as has been held by the Hon'ble Apex Court in E.P. Royappa vs. State of Tamil Nadu, (1974) 4 SCC 3 . 35. By now it is settled law that burden of proving mala-fides is on the person making allegations and burden is very heavy as has been held by the Hon'ble Apex Court in E.P. Royappa vs. State of Tamil Nadu, (1974) 4 SCC 3 . 35. In Gulam Mustafa vs. State of Maharashtra, (1976) 1 SCC 800 , Hon'ble Apex Court has held: “It (mala-fides) is the last refuge of a losing litigant.” 36. In the judgments referred herein above, Hon'ble Apex Court has held that there is every presumption in favour of the administration that the power has been exercised bona fide and in good faith. It is to be remembered that the allegations of mala-fides are often more easily made than proved and proof of high degree is required to prove the same. 37. In the instant case, it would be profitable to have a look at judgment passed by Hon'ble Apex Court in case Union of India vs. Ashok Kumar, (2005) 8 SCC 760, wherein it has been held that seriousness of allegations of mala-fides demands proof of high order of credibility and the Courts should be slow to draw dubious inferences from incomplete facts placed before them by a party, particularly when the imputations are grave and they are made against the holder of an office having high responsibility. It was held: “21. Doubtless, he who seeks to invalidate or nullify any act or order must establish the charge of bad faith, an abuse or a misuse by the authority of its powers. While the indirect motive or purpose, or bad faith or personal ill will is not to be held established except on clear proof thereof, it is obviously difficult to establish the state of a man's mind, for that is what the employee has to establish in this case, though this may sometimes be done. The difficulty is not lessened when one has to establish that a person apparently acting on the legitimate exercise of power has, in fact, been acting mala-fide in the sense of pursuing an illegitimate aim. It is not the law that mala-fide in the sense of improper motive should be established only by direct evidence. But it must be discernible from the order impugned or must be shown from the established surrounding factors which preceded the order. It is not the law that mala-fide in the sense of improper motive should be established only by direct evidence. But it must be discernible from the order impugned or must be shown from the established surrounding factors which preceded the order. If bad faith would vitiate the order, the same can, in our opinion, be deduced as a reasonable and inescapable inference from proved facts. (S. Pratap Singh vs. State of Punjab, AIR 1964 SC 72 ). It cannot be overlooked that burden of establishing mala-fides is very heavy on the person who alleges it. The allegations of mala-fides are often more easily made than proved, and the very seriousness of such allegations demand proof of a high order of credibility. As noted by this Court in E.P. Royappa vs. State of Tamil Nadu and Another, AIR 1974 SC 555 , Courts would be slow to draw dubious inferences from incomplete facts placed before it by a party, particularly when the imputations are grave and they are made against the holder of an office which has a high responsibility in the administration. (See Indian Railway Construction Co. Ltd. vs. Ajay Kumar, (2003) 4 SCC 579 ).” 38. Careful perusal of expositions of law, as discussed herein above, certainly suggests that Courts should normally not interfere in the contractual matters in exercise of powers of judicial review and it can only be exercised in case it is satisfied that process adopted was mala-fide or made to favour someone or process adopted or decision made is so arbitrary that no man of ordinary prudence could have reached. 39. It is well settled by now that every action of the executive/government must be informed with reasons and should be free from arbitrariness. That is very essence of the rationale and its bare minimal requirement and, to the application of this principle, it make no difference whether exercise of the powers involved an affectation of some right or denial of some privilege. In Tata Cellular vs. Union of India (supra) it has been specifically held that if an administrative decision, such as a deviation in the terms of the NIT is not arbitrary, irrational, unreasonable, mala-fide or biased, the Courts will not judicially review the decision taken. Similarly, the Courts will not countenance interference with the decision at the behest of an unsuccessful bidder in respect of a technical or procedural violation. Similarly, the Courts will not countenance interference with the decision at the behest of an unsuccessful bidder in respect of a technical or procedural violation. Recently, the Hon'ble Apex Court in Central Coalfields Limited vs. SLL-SML (Joint Venture Consortium) (supra), taking note of the aforesaid principles laid down in Tata Cellular vs. Union of India (Supra) reiterated that Court, while exercising its power under Article 226 in tender/contractual maters, should pose to itself 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 reasonable and in accordance with relevant law could have reached.” (ii) Whether public interest is affected.” 40. Hon'ble Apex Court, while framing aforesaid questions, categorically held that if answers to aforesaid questions are in negative, in that eventuality, Court should not be inclined to interfere in the contractual matters, while exercising powers under Article 226 of the Constitution of India. In this regard, reliance is also placed on the judgment of Hon’ble Apex Court in Central Coalfields Limited and Another vs. SLL-SML (Joint Venture Consortium) and Others, (2016) 8 SCC 622 , wherein the Hon’ble Apex Court has held as under:- 36. It was further held that if others (such as the appellant in that case) were aware that non-fulfillment of the eligibility condition of being a registered II Class hotelier would not be a bar for consideration, they too would have submitted a tender, but were prevented from doing so due to eligibility condition, which was relaxed in the case of respondents 4. This resulted in unequal treatment in favour of respondents 4 treatment that was constitutionally impermissible. Expounding on this, it was held: It is indeed unthinkable that in a democracy governed by the rule of law the executive Government or any of its officers should possess arbitrary power over the interests of the individual. Every action of the executive Government must be informed with reason and should be free from arbitrariness. That is the very essence of the rule of law and its bare minimal requirement. And to the application of this principle it makes no difference whether the exercise of the power involves affectation of some right or denial of some privilege. (Emphasis given) 43. That is the very essence of the rule of law and its bare minimal requirement. And to the application of this principle it makes no difference whether the exercise of the power involves affectation of some right or denial of some privilege. (Emphasis given) 43. Continuing in the vein of accepting the inherent authority of an employer to deviate from the terms and conditions of an NIT and reintroducing the privilege-of-participation principle and the level playing field concept, this Court laid emphasis on the decision making process, particularly in respect of a commercial contract. One of the more significant cases on the subject is the three-judge decision in Tata Cellular vs. Union of India, (1994) 6 SCC 651 which gave importance to the lawfulness of a decision and not its soundness. If an administrative decision, such as a deviation in the terms of the NIT is not arbitrary, irrational, unreasonable, mala-fide or biased, the Courts will not judicially review the decision taken. Similarly, the Courts will not countenance interference with the decision at the behest of an unsuccessful bidder in respect of a technical or procedural violation. This was quite clearly stated by this Court (following Tata Cellular) in Jagdish Mandal vs. State of Orissa, (2007) 14 SCC 517 in the following words: “22. Judicial review of administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias and mala-fides. Its purpose is to check whether choice or decision is made “lawfully” and not to check whether choice or decision is “sound.” When the power of judicial review is invoked in matters relating to tenders or award of contracts, certain special features should be borne in mind. A contract is a commercial transaction. Evaluating tenders and awarding contracts are essentially commercial functions. Principles of equity and natural justice stay at a distance. If the decision relating to award of contract is bona-fide and is in public interest, courts will not, in exercise of power of judicial review, interfere even if a procedural aberration or error in assessment or prejudice to a tenderer, is made out. The power of judicial review will not be permitted to be invoked to protect private interest at the cost of public interest, or to decide contractual disputes. The tenderer or contractor with a grievance can always seek damages in a civil court. The power of judicial review will not be permitted to be invoked to protect private interest at the cost of public interest, or to decide contractual disputes. The tenderer or contractor with a grievance can always seek damages in a civil court. Attempts by unsuccessful tenderers with imaginary grievances, wounded pride and business rivalry, to make mountains out of molehills of some technical/procedural violation or some prejudice to self, and persuade courts to interfere by exercising power of judicial review, should be resisted. Such interferences, either interim or final, may hold up public works for years, or delay relief and succour to thousands and millions and may increase the project cost manifold.” This Court then laid down the questions that ought to be asked in such a situation. It was said: “22.........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.” 41. Having perused the pleadings as well as record made available by the respondent- Corporation, this Court is compelled to conclude that Authority responsible for taking final decision in the matter has failed to apply its mind while arriving at final decision in the matter. Decision of Authority concerned is not at all fair and reasonable, who instead of examining the matter itself, proceeded to cancel the tender ignoring the opinion of standing counsel as well as noting given by one member of the Committee. Apart from above, Authority, while cancelling tender in question, also failed to examine and consider condition No. 4 contained in tender document. Had competent Authority cared/bothered to examine tender in question in the light of aforesaid condition (condition No. 4) contained in tender document, it would have definitely not taken decision dated 22nd April, 2017 and issued communication dated 29th April, 2017 to cancel the tender in question. Had competent Authority cared/bothered to examine tender in question in the light of aforesaid condition (condition No. 4) contained in tender document, it would have definitely not taken decision dated 22nd April, 2017 and issued communication dated 29th April, 2017 to cancel the tender in question. Had competent Authority applied its mind and taken decision in the light of opinion of standing counsel as well as one member of the Committee, much time of department as well as of this Court would have not been wasted. 42. This Court, after having perused record, has no hesitation to conclude that Authority not acted reasonably and judiciously, while taking final decision qua the tender submitted by petitioner firm. Though this Court was unable to find anything on record, from where it could be inferred that action of the Authority for not accepting the tender of the petitioner was mala-fide or intended to favour someone, but it is constrained to assume that process adopted or decision taken by respondent-department, while rejecting the tender submitted by the petitioner is so arbitrary and irrational that no responsible authority acting reasonably and in accordance with relevant law could have acted. Perusal of notings given in the record compels this Court to agree with the contention of learned counsel representing the petitioner that action of respondents, while dealing with the tender of the petitioner-firm, is not free from bias, rather there appears to be an attempt on the part of certain officials to ensure fresh tendering as far as purchase of Plant Protection Equipment is concerned. As has been repeatedly held by Hon’ble Apex Court that if the State or its instrumentalities act reasonably, fairly and in public interest in awarding contract, interference by Court is very restrictive since no person can claim fundamental right to carry on business with the Government. 43. Recently Hon’ble Apex Court in its judgments in Haryana Urban Development Authority and Others vs. Orchid Infrastructure Developers Private Limited, (2017) 4 SCC 243 and Reliance Telecom Limited and Another vs. Union of India and Another, (2017) 4 SCC 269 , again reiterated that basic requirement of Article 14 is fairness in action by the State, and non-arbitrariness in essence and substance is the heartbeat of fair play. These actions are amenable to the judicial review only to the extent that the State must act validly for a discernible reason and not whimsically for any ulterior purpose. 44. In the case at hand, as has been observed above, though there is nothing on record to suggest that process adopted or decision made by Authority is mala-fide or intended to favour someone, but definitely process adopted or decision made is so arbitrary or irrational that this court can conclude that no responsible authority acting reasonably and in accordance with law would have taken decision as has been taken in the present case and as such impugned action of respondents inasmuch as not cancelling the tender in question deserves to be rectified in accordance with law. 45. Consequently, in view of detailed discussion made hereinabove as well as law laid down by Hon’ble Apex Court, the decision/communication dated 22nd/29th April, 2017, taken/issued by the Managing Director, H.P. Agro Industries, cancelling therein tender in question is quashed and set aside with a further direction to the respondent-Corporation to consider the tender submitted by the petitioner with respect to purchase of Plant Protection Equipment for the year 2017-18, ignoring the alleged short comings as pointed by “TOC” and “TSSC” and thereafter award rate contract in its favour, if it is a lowest bidder. Needless to say authorities concerned while examining/analyzing tender in the light of direction issued by this Court shall act judiciously strictly in accordance with law without there being any malice towards the petitioner. Necessary action in terms of direction passed by this Court shall be taken by the authorities concerned within fifteen days from the receipt of copy of instant judgment. 46. Before parting, we are constrained to place on record our displeasure and anguish over the practice adopted by the respondents-Authorities while dealing with the tender in question and as such respondents-authorities are warned to be more careful and cautious in future while discharging their duties. Registry is directed to supply a copy of this judgment to the Chief Secretary to the Government of Himachal Pradesh, so that necessary safeguards/steps are taken by the Government, to sensitize/educate its officers with regard to procedure/approach required to be followed and adopted in the tender matters. 47. Registry is directed to supply a copy of this judgment to the Chief Secretary to the Government of Himachal Pradesh, so that necessary safeguards/steps are taken by the Government, to sensitize/educate its officers with regard to procedure/approach required to be followed and adopted in the tender matters. 47. Since petitioner was unnecessarily pushed to the wall and it was compelled to initiate legal proceedings in the Court of law, respondents-authorities are liable to compensate it suitably, accordingly costs of Rs. 1 lac is imposed upon the respondents-authorities, which shall be paid within a period of six weeks from today. Accordingly, the writ petition is disposed of in the aforesaid terms. 48. Interim direction, if any, is vacated. All miscellaneous applications are disposed of.