A. K. Engineers and Contractors Pvt. Ltd. v. Jammu and Kashmir Projects Construction Corporation Ltd.
2017-03-23
TASHI RABSTAN
body2017
DigiLaw.ai
JUDGMENT : 1. Jammu and Kashmir Projects Construction Corporation Limited vide e-NIT No.JKPCC/U-4th/J/02 of 2016-17 dated 25th July 2015,invited E-Tenders from approved and eligible contractors/firms registered with J&K Government/other State Governments/CPWD/MES/Railways/BRO for design and construction of 1600 Metre span Composite Type (Partly Balanced) Cantilever/Partly Prestressed box girder) double lane Bridge with 1.5 Metre wide footpaths on both sides including approaches of length 2550 Meter (2250 Meter) (2250 Metre on Right Side & 300 Metre on Left Side) over River Chenab at Sajwal (Pargwal) – Indri Pattan (Jourian) District Jammu. One of the conditions of NIT is that “Bids from Joint Venture are not allowed”. It is this condition, of which petitioner is aggrieved of and throws challenge thereto. 2. The case set up by petitioner is that petitioner company is incorporated under Companies Act, 1956 and that it is “A” Class Contractor duly registered with Public Works Department since 1985 and has successfully executed several projects within the State. Petitioner is stated to be involved and instrumental in construction of various bridges of complex nature and has earned good reputation in professional field as Professional Contracting Agency having vast expertise in Bridge construction and petitioneris well equipped and possess required and specialised equipment. NIT conditions are contended to have made ineligible joint ventures to participate in tendering process and the bidder should have experience of executing, at least, one similar nature of work equal to 33% of total cost of work, during last five years i.e. work of Rs.5775.00 lacs. According to petitioner, condition 4.2(A) has been incorporated in tailor made fashion to suit particular bidders and oust local contractors, who single handed cannot qualify condition 4.3(b) and have to enter into Joint Venture agreement to qualify condition 4.3(b) and that there is no rationale to debar joint ventures from participating in tender process, irrespective of their bidding capacity to execute the work. Further averment of petitioneris that it has experience of executing work of similar nature amounting to Rs.4887.80 lacs from Ganpat Bridge, Doda, itself as a single work. Additionally, petitioner is in process of entering into joint venture exclusively for purpose of participating in tender proceedings to qualify the bid condition 4.3 (b).
Further averment of petitioneris that it has experience of executing work of similar nature amounting to Rs.4887.80 lacs from Ganpat Bridge, Doda, itself as a single work. Additionally, petitioner is in process of entering into joint venture exclusively for purpose of participating in tender proceedings to qualify the bid condition 4.3 (b). Combined experience of constituents of Joint Venture, according to petitioner, can be treated as experience of Joint Venture and combined experience of proposed joint venture is more than 33% of total cost of project, therefore, proposed joint venture of petitioner would qualify condition 4.3 (b). It would not make any difference either to successful completion of the project or to any other bidder, if Joint venture is allowed to participate in the tendering process, as stated by petitioner in writ petition. Its further contention is that allowing joint ventures to participate in bidding process will lead to healthy competition and more competent bidders will come forward to partake in bidding process. Petitioner asserts that it is well accepted practice that for purpose of executing high valued projects, two companies or contractors formulate a joint venture, so as to share their experience and expertise for the successful completion of project and that companies also form a joint venture to qualify the bid conditions. Petitioner’s further assertion is that the bidder, in the present case, is required to produce successful completion certificate of having executed one similar work equal to 33% of the total cost of the project, which amounts to Rs.57.75 crores and according to petitioner, itas an individual company does not qualify the said condition but it is already proposed to enter into joint venture in order to qualify the bid conditions, pertaining to 33% of joint experience of the members of joint venture. However, due to clause 4.2(A), as maintained by petitioner, being arbitrary and tailor made, would not make petitioner able to qualify the experience conditions. Petitioner submits that debarring joint ventures from participating in the bid process, has no reasonable nexus with the successful completion of the project or quality of work. The projects, according to petitioner, wherein huge stakes are involved and are of public importance, generally an eligibility clause is introduced that the contractor should have completed similar nature of works equivalent to some percentage of the project cost.
The projects, according to petitioner, wherein huge stakes are involved and are of public importance, generally an eligibility clause is introduced that the contractor should have completed similar nature of works equivalent to some percentage of the project cost. The rationale behind introducing such clause is to ensure that successful bidder has capacity, experience and expertise, to successfully execute the project inasmuch as it is very unlikely for any single contractor to qualify such bid condition on its own, therefore, concept of joint venture was introduced in the construction business, so that two companies/contractors can come together and share their expertise/experience and participate in the tendering process for the purpose of qualifying the bid conditions. Petitioner’s one more submission is that if a bidder has requisite experience as a joint venture, then there is no rationale behind debarring the joint venture from participating in bidding process, thus, the decision of respondent authority in excluding joint ventures from participating in tendering process is arbitrary and irrational. Joint venture, as mentioned in writ petition, is a separate legal entity which can sue and be sued in its own name and joint venture has all attributes of partnership and that interestingly partnership firms have not been debarred but joint venture which is held by the Supreme Court to have all attributes of partnership has been made ineligible and impugned bid conditions are outcome of non-application of mind by respondent authority. 3. On the edifice of case set up, petitioner seeks following relief:— a. Writ of Certiorari, seeking quashment of illegal and arbitrary condition 4.2A of the Notice inviting Tender, numbered, e-NIT No.JKPCC/U-4th/J/02 of 2016-17 dated 25/07/2016, debarring the Joint Venture from participating in the bidding process. b. Writ of Prohibition restraining the respondents from allocation the contract in question, in pursuance to Notice Inviting Tender, numbered e-NIT No.JKPCC/U-4th/J/02 of 2016-17 dated 25/07/2016. c. Writ of Mandamus directing the respondents to accept the bids from joint ventures, in response to Notice Inviting Tender, numbered, e-NIT No.JKPCC/U-4th/J/02 of 2016-17 dated 25/07/2016. 4. Reply has been filed by respondents, counterattacking doughtily writ petition.
c. Writ of Mandamus directing the respondents to accept the bids from joint ventures, in response to Notice Inviting Tender, numbered, e-NIT No.JKPCC/U-4th/J/02 of 2016-17 dated 25/07/2016. 4. Reply has been filed by respondents, counterattacking doughtily writ petition. Respondents maintain that despite being fully aware about issuance of NIT, petitioner did not either submit his tender nor raised any objection, but chose to approach this Court at a stage when technical bid had since been opened and successful bidders are in the zone of consideration and that in view of the fact that petitioner has not submitted his bid in any format, at this stage it may not be permissible to treat petitioner at par with other bidders, when petitioner has no cause muchless a cause sustainable in law. Petitioner’s chiefgravamen, as avowed by respondents, is that exclusion of joint venture is not legally valid, notwithstanding the fact that petitioner is an individual firm and is not a joint venture. For respondents, petitioner is not justified in law in invoking writ jurisdiction especially in matter relating to allotment of contracts vis-a-vis this Court and the Supreme Court have set at rest the controversy. Petitioner is said to have deliberately filed writ petition aiming at to vitiate the entire bidding process of the project, that having effect of jeopardizing its timely completion, which holds great public importance and utility. Respondents’ further assertion is that petitioner admittedly being a non-participant in bidding process for the said project, has no locus standi to challenge the same since neither its fundamental nor has its legal right been infringed. According to respondents, terms and conditions of Notice Inviting e-Tender, were always in the knowledge of petitioner but petitioner chose not to participate in bidding process, as such, there is no occasion for petitioner to now challenge bidding process. Petitioner has, as insisted by respondents in their Reply, approached this Court in December 2016, whileas opening of technical bid took place on 2nd November 2016 and bidding process is at an advanced stage. Three tenders are stated to have been received from leading National Bridge Construction firms.
Petitioner has, as insisted by respondents in their Reply, approached this Court in December 2016, whileas opening of technical bid took place on 2nd November 2016 and bidding process is at an advanced stage. Three tenders are stated to have been received from leading National Bridge Construction firms. Had petitioner any grievance qua clauses of NIT, he ought to have preferred writ petition immediately after issuance of NIT, but he filed it merely to prejudice tendering process and interests of public as well as other participants to tender process and that writ petition is an afterthought as petitioner never chose to attend/make representation at pre-bid meeting, which was held on 27th August 2016 in the office of respondent no.1 inasmuch as said pre-bid meeting was conducted to ensure that any question/clarification of prospective bidders were addressed even before bidding process commences, but petitioner never attended it nor made any representation. Unnecessary delay shall be caused in timely completion of the project and it would further be in grave detriment to interests of public at large, which are paramount, and also interests of bidders, who have already submitted their bids within stipulated time contemplated in the NIT, is contention of respondents in their reply. Respondents firmly maintain that condition 4.2(A), prohibiting joint venture entities from participating in tender process, is based on sound rationale because it is known fact that majority of joint ventures break down owing to various management issues, consequent effects on the performance and enforcement of contract and that it is also well known that unlike other jurisdiction around the world, in India there is no single statute of law governing working of joint ventures or relationship of partners of such joint ventures inter se each other, which creates further ambiguity as regards relationship between parties and their potential rights and obligations. 5. I have heard learned counsel for parties at length. I have gone through the pleadings and considered the matter. 6. Learned counsel for petitioner, while dilating the arguments, submits that clause 4.2(A) of bid document provides that bids from joint ventures shall not be accepted by tendering authority and that such condition has been deliberately and mala fidely incorporated in the bid document so as to oust particular set of tenderers, including petitioner inasmuch as none of the contractors from the State of J&K are able to qualify the bid.
Incorporation of clause 4.2(A), as argued by learned counsel for petitioner, would give rise to cartel formation and simultaneously debar other competent bidders like joint ventures and that it is well accepted practice that for purposes of executing high valued projects, two companies or contractors formulate a joint venture, so as to share their experience and expertise for the successful completion of the project; that the companies also form a joint venture to qualify the bid condition. Learned counsel also avers that it is already proposed to enter into joint venture so as to qualify the bid conditions, pertaining to 33% of the joint experience of members of Joint venture. However, due to clause 4.2(A), which is arbitrary and tailor made, petitioner would not be able to qualify experience conditions and debarring joint ventures from participating in the bid process, has no reasonable nexus with successful completion of the project or quality of work, thus, clause 4.2(A) of the bid document is arbitrary and liable to be quashed. In support of his submissions learned counsel for petitioner places reliance on New Horizon Limited and another v. Union of India and others, (1995) 1 SCC 478 ; Meerut Development Authority v. Association of Management Studies and another, (2009) 6 SCC 171 ; and Vijay Stone Product and Anr. v. Union of India and Ors., AIR 2010 All 26 . 7. Per contra, learned senior counsel for respondents states that petitioner was fully aware and had knowledge of NIT and its terms and conditions and petitioner chose not to participate in bidding process, thus, there is no occasion for petitioner to challenge bidding process owing to settled position of law as enunciated by the Supreme Court in Villianur Iyarkkai Padukappu Maiyam v. Union of India, (2009) 7 SCC 561 , and reiterated by various High Courts, that on account of non-participation in the tender process, a party shall have no locus for assailing the same as neither of its fundamental or legal rights can be infringed. Petitioner has, as pointed out by learned senior counsel respondents, approached this Court in December 2016 while as opening of technical bid took place on 2nd November 2016 and bidding process is at an advanced stage and three tenders have been received from leading National Bridge Construction firms.
Petitioner has, as pointed out by learned senior counsel respondents, approached this Court in December 2016 while as opening of technical bid took place on 2nd November 2016 and bidding process is at an advanced stage and three tenders have been received from leading National Bridge Construction firms. Had petitioner any grievance qua clauses of NIT, he ought to have preferred writ petition right after issuance of NIT, but he filed it merely to prejudice tendering process and interests of public as well as other participants to tender process and that writ petition is an afterthought as petitioner never opted to attend/make representation at pre-bid meeting, which was held on 27th August 2016 in the office of respondent no.1 inasmuch as the said pre-bid meeting was conducted to ensure that any question/clarification of prospective bidders were addressed even before bidding process commences, but petitioner never attended it nor made any representation. According to learned senior counsel unnecessary delay shall be caused in timely completion of the said project and same would further be in grave detriment to interests of public at large, which are of supreme importance. He also states that condition 4.2(A), to prohibit joint venture entities from participating in tender process, is based on sound rationale as it is known fact that majority of joint ventures break down owing to various management issues, consequent effects on the performance and enforcement of contract and that it is also well known that unlike other jurisdiction around the world, in India there is no single statute of law to govern working of joint ventures or relationship of partners of such joint ventures that creates further ambiguity concerning relationship between parties and their potential rights and obligations. As said by learned senior counsel for respondents, the courts have repeatedly held that tender clauses involving exclusion of joint ventures from participation are valid and cannot be termed as unreasonable clauses and in this regard reference has been made to Vijay Stone Products v. Union of India case (supra) and M/s Shapoorji Pallonji v. Nuclear Power Corporation of India Limited, WP (MD) 16872 of 2016. 8.
8. Learned senior counsel for respondents further avers that jurisdiction of the High Courts under Article 226 of the Constitution of India with regard to challenge to the terms and conditions of a tender is extremely limited and the Supreme Court has held on numerous occasions that fixation of tender conditions is entirely within purview of executive and court has little role to play in the tender process except interfere with such action of executive which are palpably arbitrary or unreasonable. The Supreme Court has further recognised that the State has prerogative to impose preconditions and/or qualification for bidders to ensure that successful bidder has capacity and resources to successfully execute awarded contract. In the above context, he submits that petitioner fails to establish as to how any arbitrariness has been occasioned at the instance of respondents and thus writ petition is liable to be dismissed. To buttress his arguments, learned senior counsel places reliance on Michigan Rubber (India) Limited v. State of Karnataka, (2012) 8 SCC 216 ; Meerut Development Authority case (supra); Tata Cellular v. Union of India, (1994) 6 SCC 651 ; Monarch Infrastructure (P) Ltd v. Commr. Ulhasnagar Municipal Corporation, (2005) 5 SCC 287; Mutha Associates and Ors. v. State of Maharashtra and Ors., (2013) 14 SCC 304 ; and Maa Binda Express Carrier and another v. North East Frontier Railway and others, (2014) 3 SCC 760 . 9. Before adverting to case in hand, it is germane to say that the law relating to award of a contract by the State, its corporations and bodies acting as instrumentalities and agencies of the Government, has been settled by the Supreme Court in R. D. Shetty v. International Airport Authority, 1979 (3) SCC 488 ; Fertilizer Corporation Kamgar Union v. Union of India, 1981 (1) SCC 568 ; Assistant Collector, Central Excise v. Dunlop India Ltd., 1985 (1) SCC 260 ; Tata Cellular case (supra); Ramniklal N. Bhutta v. State of Maharashtra, 1997 (1) SCC 134 ; and Raunaq International Ltd. v. I.V.R. Construction Ltd. 1999 (1) SCC 492 . The award of a contract, whether it is by a private party or by a public body or the State, is essentially a commercial transaction. The process of giving thoughtful consideration to arrive at a commercial decision is preponderant and such consideration is always in the nature of commercial consideration.
The award of a contract, whether it is by a private party or by a public body or the State, is essentially a commercial transaction. The process of giving thoughtful consideration to arrive at a commercial decision is preponderant and such consideration is always in the nature of commercial consideration. The State can choose its own method to arrive at a decision. It can fix its own terms of invitation to tender and that is not open to judicial scrutiny. It can enter into negotiations before finally deciding to accept one of the offers made to it. Price need not always be the sole criterion for awarding a contract. It is free to grant any relaxation, for bona fide reasons, if the tender conditions permit such a relaxation. It may not accept the offer even though it happens to be the highest or the lowest. But the State, its corporations, instrumentalities and agencies are bound to adhere to the norms, standards and procedures laid down by them and cannot depart from them arbitrarily. Though that decision is not amenable to judicial review, the Court can examine decision making process and interfere if it is found vitiated by mala fides, unreasonableness and arbitrariness. The State, its corporations, instrumentalities and agencies have the public duty to be fair to all concerned. Even when some defect is found in the decision making process the Court must exercise its discretionary power under Article 226 with great caution and should exercise it only in furtherance of public interest and not merely on the making out of a legal point. The Court should always keep the larger public interest in mind with the aim 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. 10. After making the above discussion, what is important to be seen is that what the Supreme Court has discussed in New Horizons Ltd case (supra), cited by learned counsel for petitioner. The Supreme Court has pointed out that in the matter of entering into a contract, the State does not stand on the same footing as a private person, who is free to enter into a contract with any person he likes.
The Supreme Court has pointed out that in the matter of entering into a contract, the State does not stand on the same footing as a private person, who is free to enter into a contract with any person he likes. The action of the State in the matter of award of a contract has to satisfy the criterion as mandated by Article 14 of the Constitution, which excludes arbitrariness in State action and requires the State to act fairly and reasonably. Besides, a contract would either involve expenditure from the State exchequer or augmentation of public revenue and consequently the discretion in the matter of selection of the person for award of the contract has to be exercised keeping in view the public interest involved in such selection. It is, however, recognised that certain measure of “free play in the joints” is necessary for an administrative body functioning in an administrative sphere. 11. In Peerless General Finance and Investment Co. Ltd. v. Reserve Bank of India etc., (1992) 2 SCC 343 , the accent of power of the Courts interfering in such economic policy matters was considered and it was held that the function of the Court is to see that lawful authority is not abused but not to appropriate to itself the task entrusted to that authority. It is well settled that a public body invested with statutory powers must take care not to exceed or abuse its power. It must keep within the limits of the authority committed to it. It must act in good faith and it must act reasonably. Courts are not to interfere with economic policy which is the function of experts. It is not the function of the courts to sit in judgment over matters of economic policy and it must necessarily be left to the expert bodies. In such matters even expert can seriously and doubtlessly differ. Courts cannot be expected to decide them without even the aid of experts. 12. In State of Orissa and another v. Mamata Mohanty, (2013) 3 SCC 436, the Supreme Court observed that every action of the State or its instrumentalities should neither be suggestive of discrimination nor even an impression of bias, favouritism and nepotism. There can be no infringement of Article 14, if the Government tries to get best person or best quotation.
In State of Orissa and another v. Mamata Mohanty, (2013) 3 SCC 436, the Supreme Court observed that every action of the State or its instrumentalities should neither be suggestive of discrimination nor even an impression of bias, favouritism and nepotism. There can be no infringement of Article 14, if the Government tries to get best person or best quotation. The right to choose cannot be considered to be an arbitrary power, is trite law on the subject. 13. The award of a contract, whether it is by a private party or a public body or the State, is essentially a commercial transaction. In arriving at a commercial decision, considerations, which are of paramount importance, are commercial considerations. These would be whether the person tendering has ability to deliver goods or services as per specifications; when large works contracts involving engagement of substantial manpower or requiring specific skills are to be offered, the financial ability of the tenderer to fulfil the requirements of the job is also important; the ability of tenderer to deliver goods or services or to do the work of requisite standard and quality; past experience of the tenderer, and whether he has successfully completed similar work earlier; the ability of the tenderer to take follow up action, rectify defects or to give post contract services. It may not be out of place to mention here that trite law on the subject-matter is that what are the elements of public interest? (1) Public money would be expended for the purposes of the contract; (2) The goods or services which are being commissioned could be for a public purpose, such as, construction of roads, public buildings, power plants or other public utilities. (3) The public would be directly interested in the timely fulfilment of the contract so that the services become available to the public expeditiously. (4) The public would also be interested in the quality of the work undertaken or goods supplied by the tenderer.
(3) The public would be directly interested in the timely fulfilment of the contract so that the services become available to the public expeditiously. (4) The public would also be interested in the quality of the work undertaken or goods supplied by the tenderer. Poor quality of work or goods can lead to tremendous public hardship and substantial financial outlay either in correcting mistakes or in rectifying defects or even at times in re-doing the entire work - thus involving larger outlays or public money and delaying the availability of services, facilities or goods e.g. A delay in commissioning a power project, could lead to power shortages, retardation of industrial development, hardship to the general public and substantial cost escalation. Insofar as present case is concerned, the admitted submission of petitioner is that he lacks in qualifying the conditions contained in the Notice Inviting Tender. Hence, the right to choose a competent person, capable to undertake the important work, cannot be considered as an arbitrary power on part of respondent JKPCC. 14. In Tata Cellular case (supra), the Supreme Court examined the scope of judicial review in the case of a tender awarded by a public authority for carrying out certain work. This Court acknowledged that the principles of judicial review can apply to the exercise of contractual powers by Government bodies in order to prevent arbitrariness or favouritism. However, there are inherent limitations in the exercise of that power of judicial review. The Court also observed that the right to choose cannot be considered as an arbitrary power. After examining a number of authorities, the Court concluded as by saying that:- (1) The modern trend points to judicial restraint in administrative action. (2) The court does not sit as a court of appeal but merely reviews the manner in which the decision was made. (3) The court does not have the expertise to correct the administrative decision. If a review of the administrative decision is permitted it will be substituting its own decision, without the necessary expertise, which itself may be fallible. (4) The terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to tender is in the realm of contract. (5) The Government must have freedom of contract.
If a review of the administrative decision is permitted it will be substituting its own decision, without the necessary expertise, which itself may be fallible. (4) The terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to tender is in the realm of contract. (5) The Government must have freedom of contract. In other words, a fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative or quasi administrative sphere. However, the decision can be tested by the application of the “Wednesbury principle” of reasonableness and the decision should be free from arbitrariness, not affected by bias or actuated by mala fides. (6) Quashing decisions may impose heavy administrative burden on the administration and lead to increased arid unbudgeted expenditure. 15. In Jagdish Mandal v. State of Orissa and Ors., (2007) 14 SCC 517 , the Supreme Court has held that a contract is a commercial transaction and 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. 16. Tender, in the present scenario, was floated and offers invited for highly complex technical subjects. It requires understanding and appreciation of the nature of work and the purpose it is going to serve. It is common knowledge in the competitive commercial field that technical bids pursuant to notice inviting tenders are scrutinised by technical experts and sometimes third party assistance from those not connected with owner’s organisation is taken. This ensures objectivity. It is because to check and ascertain that technical ability and financial feasibility are confidently optimistic and cheerful and are workable and realistic. There is multifaceted complex approach, highly technical in nature. The tenders, where public largesse is put to auction, stand on a different area. The subject matter of case in hand requires technical expertise. Parameters applied in it are different. Its aim is to achieve high degree of perfection in execution and adherence to the time schedule. In view of that, technical evaluation or comparison by this Court would be impermissible.
The subject matter of case in hand requires technical expertise. Parameters applied in it are different. Its aim is to achieve high degree of perfection in execution and adherence to the time schedule. In view of that, technical evaluation or comparison by this Court would be impermissible. The principle which is applied to scan and understand an ordinary instrument relatable to contract in other spheres, has to be treated differently interpreting and appreciating tender documents and conditions contained in tender inviting notice relating to technical works and projects requiring special skills. My view is fortified by the observations and conclusions drawn by the Supreme Court in Montecarlo Ltd v. NTPC Ltd., AIR 2016 SC 4946 . It observed:- “24. We respectfully concur with the aforesaid statement of law. We have reasons to do so. In the present scenario, tenders are floated and offers are invited for highly complex technical subjects. It requires understanding and appreciation of the nature of work and the purpose it is going to serve. It is common knowledge in the competitive commercial field that technical bids pursuant to the notice inviting tenders are scrutinised by technical experts and sometimes third party assistance from those unconnected with the owner’s organization is taken. This ensures objectivity. Bidder’s expertise and technical capability and capacity must be assessed by the experts. In the matters of financial assessment, consultants are appointed. It is because to check and ascertain that technical ability and the financial feasibility have sanguinity and are workable and realistic. There is multi-prong complex approach; highly technical in nature. The tenders where public largesse is put to auction stand on a different compartment. Tender with which we are concerned, is not comparable to any scheme for allotment. This arena which we have referred requires technical expertise. Parameters applied in it are different. Its aim is to achieve high degree of perfection in execution and adherence to the time schedule……Technical evaluation or comparison by the Court would be impermissible. The principle that is applied to scan and understand an ordinary instrument relatable to contract in other spheres has to be treated differently than interpreting and appreciating tender documents relating to technical works and projects requiring special skills. The owner should be allowed to carry out the purpose and there has to be allowance of free play in the joints.” 17.
The owner should be allowed to carry out the purpose and there has to be allowance of free play in the joints.” 17. In Central Coalfields Ltd. v. SLL-SML (Joint Venture Consortium), AIR 2016 SC 3814 , it is held by the Supreme Court, while relying on a host of decisions, that the decision making process of the employer or owner of the project in accepting or rejecting the bid of a tenderer, should not be interfered with. Interference is permissible only if the decision making process is mala fide or is intended to favour someone. Similarly, the decision should not be interfered with, unless the decision is so arbitrary or irrational that the Court could say that the decision is one, which no responsible authority acting reasonably and in accordance with law, could have reached. In other words, the decision making process or the decision should be perverse and not merely faulty or incorrect or erroneous. The constitutional Courts are expected to exercise restraint in interfering with the administrative decision and ought not to substitute its view for that of the administrative authority. 18. The Supreme Court in Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corporation Ltd., AIR 2016 SC 4305 has pointed out that mere disagreement with the decision making process of the authority is no reason for a constitutional Court to interfere. The owner of a project as author of tender, is best person to understand and appreciate its requirements and interpret its documents. The constitutional Courts must defer to this understanding and appreciation of the tender documents and it is possible that the owner may give interpretation to tender documents, which is unacceptable to constitutional Courts, but that per se is not a reason for interfering with the interpretation given. The Supreme Court held:- “13. In other words, a mere disagreement with the decision making process or the decision of the administrative authority is no reason for a constitutional Court to interfere. The threshold of mala fides, intention to favour someone or arbitrariness, irrationality or perversity must be met before the constitutional Court interferes with the decision making process or the decision. …. 15. We may add that the owner or the employer of a project, having authored the tender documents, is the best person to understand and appreciate its requirements and interpret its documents.
…. 15. We may add that the owner or the employer of a project, having authored the tender documents, is the best person to understand and appreciate its requirements and interpret its documents. The constitutional Courts must defer to this understanding and appreciation of the tender documents, unless there is mala fide or perversity in the understanding or appreciation or in the application of the terms of the tender conditions. It is possible that the owner or employer of a project may give an interpretation to the tender documents that is not acceptable to the constitutional Courts but that by itself is not a reason for interfering with the interpretation given.” 19. The Supreme Court has also in Gujarat Maritime Board v. L&T Infrastructure Development Projects Ltd. and another, AIR 2016 SC 4502 , pointed out that normally the courts would not exercise such a discretion where there are very serious disputed questions of fact, which are of complex nature and require oral evidence for their determination. Even in cases where question is of choice or consideration of competing claims before entering into the field of contract, the facts have to be investigated and found before the question of violation of Article 14 of the Constitution, could arise. If those facts are disputed and require assessment of evidence, the correctness of which can only be tested satisfactorily by taking detailed evidence, involving examination and cross-examination of witnesses, the case could not be conveniently or satisfactorily decided in proceedings under Article 226 of the Constitution. 20.
If those facts are disputed and require assessment of evidence, the correctness of which can only be tested satisfactorily by taking detailed evidence, involving examination and cross-examination of witnesses, the case could not be conveniently or satisfactorily decided in proceedings under Article 226 of the Constitution. 20. From the above comprehensive discussion, what is deducible is that: (i) the terms of invitation to tender cannot be open to judicial scrutiny because invitation of tender is in the realm of contract; the decision to accept tender or award contract is reached by process of negotiations through several tiers; more often than not, such decisions are made qualitatively by experts, (ii) Government must have freedom of contract,(iii) there can be no question of infringement of Article 14, if Government tries to get the best person or best quotation; the right to choose cannot be considered to be an arbitrary power, (iv) the court does not sit as a court of appeal; (v) the court does not have expertise to correct the administrative decision; if a review of administrative decision is permitted, it will be substituting its own decision, without necessary expertise which itself may be fallible, (vi) quashing decision may impose heavy administrative burden on administration and lead to increased and unbudgeted expenditure. 21. Further to point out here that if the rights are purely on private character, no mandamus can be issued, it has been significantly made clear by the Supreme Court in Andi Mukta Sadguru Shree Muktajee Vandas Swami Suvarna Jayanti Mahotsav Samark Trust & Ors. v. R. Rudani & Ors., (1989) 2 SCC 691 . Thus, even if the respondent is a ‘State’, other condition, which has to be satisfied for issuance of a writ of mandamus is the public duty. In a matter of private character or purely contractual field, no such public duty element is involved and, thus, mandamus will not lie. There is line of decisions on the subject-matter where the contract entered between the State and the persons aggrieved is non-statutory and purely contractual and the rights are governed only by the terms of the contract, no writ or order, it is a trite law, can be issued under Article 226 of the Constitution of India so as to compel the authorities to remedy a breach of contract. 22.
22. It is not appropriate for the Court to interfere in a decision taken by the Government or the authorities concerned, after due consideration of all perspectives and full application of mind. The Supreme Court in N. D. Jayal vs. Union of India, (2004) 9 SCC 362 , has observed:— “This Court cannot sit in judgment over the cutting edge of scientific analysis relating to the safety of any project. Experts in science may themselves differ in their opinions while taking decision on matters related to safety and allied aspects. The opposing viewpoints of the experts will also have to be given due consideration after full application of mind. When the Government or the authorities concerned after due consideration of all viewpoints and full application of mind took a decision, then it is not appropriate for the court to interfere.” 23. I have an occasion to have fleeting look of notice inviting tender, issued by respondent JKPCC vide e-NIT No.JKPCC/U-4th/J/02 of 2016-17 dated 25th July 2015, inviting e-Tenders from approved and eligible contractors/firms registered with J&K Government/other State Governments/CPWD/MES/Railways/BRO, for design and construction of 1600 Metre span Composite Type (Partly Balanced) Cantilever/Partly Prestressed box girder) double lane Bridge with 1.5 Metre wide footpaths on both sides including approaches of length 2550 Metre (2250 Meter) (2250 Metre on Right Side & 300 Metre on Left Side) over River Chenab at Sajwal (Pargwal) – Indri Pattan (Jourian) District Jammu. The estimated cost of the project is Rs.17,500.00 Lacs. It is pertinent to point out here that while having glance of terms and conditions of NIT it comes to fore that as per instructions of Ministry of Road Transport & Highway bearing no.RW/NH- 12014/862/2014/J&KNH-1 dated 9th May 2016, circulated by Public Works (Roads & Buildings) Department, J&K, vide no.PW(R&B)/Plan/97/ 2011 dated 17th May 2016, the qualifying criteria of Standard Bidding Document (SBD) of Ministry, required to be fulfilled by the contractors, are that the existing provision for qualification criteria as regards average turnout of civil works over the last five years should be 40% of the contract(s) applied for. But respondent JKPCC has given relaxation to the contractors of J&K State. The average annual turnout of civil works over the last five years qua contractors of J&K State has been reduced to 33% of the contract(s) applied for.
But respondent JKPCC has given relaxation to the contractors of J&K State. The average annual turnout of civil works over the last five years qua contractors of J&K State has been reduced to 33% of the contract(s) applied for. Similarly, the extant provision for experience in successfully completing or substantially completing, at least, one contract of highway (road and/or bridge works)/airport runway, should be not less than 40% of the value of the proposed contract within the last five years whereas the said provision has been reduced by respondent JKPCC to 33%. In case of Batch type MHP with electronic controls, the existing provision is 80- 100 TPH capacity, which has been relaxed by respondent JKPCC to 40-60 TPH capacity. Not only this, the existing provision for bidder to furnish the proposal, if any, for subcontracting of work, costing more than 10% of the bid amount whereas respondent JKPCC has relaxed it and the bidders of the J&K State are allowed to subcontract for non-mechanized works i.e. earthwork, sub base work, and minor CD (HP/Culverts) costing upto 50% of the bid amount to encourage local participation. These important facets cannot be ignored. If we go by the said aspects of the matter, there is no gainsaying that respondent JKPCC has given open field for local participation. Having regard to nature of work, impugned condition in the NIT that “Bids from Joint Venture are not allowed” needs no interference. Candidly saying, this Court cannot ask or foist respondent to forego the said condition as petitioner is unable to fulfil the said condition. Respondent JKPCC has expert’s body available to take into account all facets as regards laying of condition that “Bids from Joint Venture are not allowed”. This Court cannot ask respondent JKPCC that “Joint Venture” is in the best interest of JKPCC. The reason being that it is in the field and domain of respondent JKPCC and this Court cannot step into the shoes of JKPCC to decide what would be and would not be better for JKPCC. It is exclusive domain of JKPCC and not that of this Court. 24.
The reason being that it is in the field and domain of respondent JKPCC and this Court cannot step into the shoes of JKPCC to decide what would be and would not be better for JKPCC. It is exclusive domain of JKPCC and not that of this Court. 24. It is entirely within the area, within which respondent JKPCC has authority, influence and knowledge to make fixation of a value of the tender and the court hardly has any role to play in this process except for striking down such action of respondent JKPCC as is proved to be arbitrary or unreasonable. If the Government, or say in the present case respondent JKPCC, acts in conformity with certain healthy standards and norms, such as awarding contracts by inviting tenders, in those circumstances, the interference by the Court is very limited. In the matter of formulating conditions of a tender document and awarding a contract, greater latitude is required to be conceded to the State authorities unless the action of tendering authority is found to be malicious and a misuse of its statutory powers, interference by Courts is not warranted. Certain preconditions or qualifications for tenders have to be laid down to ensure that contractor has capacity and resources to successfully execute the work. If the State or its instrumentalities act reasonably, fairly and in public interest in awarding contract, here again, interference by the Court is very restrictive since no person can claim fundamental right to carry on business with the Government. Same is true about the present case. In this respect, regard being had from the decision of the Supreme Court in Michigan Rubber (India) Ltd. case (supra), in which the legal position qua the subject was summed up after a comprehensive review and principles of law applicable to the process for judicial review identified in the following words:— “19. From the above decisions, the following principles emerge:— (a) the basic requirement of Article 14 is fairness in action by the State, and no 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.
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. If the State acts within the bounds of reasonableness, it would be legitimate to take into consideration the national priorities; (b) fixation of a value of the tender is entirely within the purview of the executive and courts hardly have any role to play in this process except for striking down such action of the executive as is proved to be arbitrary or unreasonable. If the Government acts in conformity with certain healthy standards and norms such as awarding of contracts by inviting tenders, in those circumstances, the interference by Courts is very limited; (c) In the matter of formulating conditions of a tender document and awarding a contract, greater latitude is required to be conceded to the State authorities unless the action of tendering authority is found to be malicious and a misuse of its statutory powers, interference by Courts is not warranted; (d) Certain preconditions or qualifications for tenders have to be laid down to ensure that the contractor has the capacity and the resources to successfully execute the work; and (e) If the State or its instrumentalities act reasonably, fairly and in public interest in awarding contract, here again, interference by Court is very restrictive since no person can claim fundamental right to carry on business with the Government. 20. 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”; and (ii) Whether the public interest is affected. If the answers to the above questions are in negative, then there should be no interference under Article 226.” 25. Insofar as petitioner’s contention as to mala fide is concerned, the law regarding pleading and proof of mala fides is indeed settled by a long line of decisions of the Supreme Court and High Courts.
If the answers to the above questions are in negative, then there should be no interference under Article 226.” 25. Insofar as petitioner’s contention as to mala fide is concerned, the law regarding pleading and proof of mala fides is indeed settled by a long line of decisions of the Supreme Court and High Courts. The decisions broadly recognise requirement of allegations, suggesting mala fide to be specific and supported by necessary particulars. Vague and general averments to the effect that the action under review was taken mala fide would not, therefore, suffice. Equally well settled is the principle that the burden to establish that the action under challenge was indeed mala fide, rests heavily upon the person making the charge, which is taken as quasi criminal in nature and can lead to adverse consequence for the person who is proved to have acted mala fide. There is in fact a presumption that the public authority acted bona fide and in good faith. That presumption can no doubt be rebutted by the person making the charge albeit only on cogent and satisfactory proof whether direct or circumstantial or on admitted facts that may support an inference that the action lacked bona fides and was for that reason vitiated. The third principle equally sanctified by judicial pronouncements is that the person against whom the charge is made, must be impleaded as a party to the proceedings and given an opportunity to refute the charge against him. I may at this stage refer to a few decisions of the Supreme Court to illustrate the above, for a copious reference to all the pronouncements is unnecessary and can be avoided. 26. In State of Bihar v. P.P. Sharma, 1992 (Supp. 1) SCC 222, the Supreme Court explained the juristic significance of mala fides and the questions that need to be determined while examining plea based on mala fides. The following passage is apposite in this regard:- “50. Mala fides means want of good faith, personal bias, grudge, oblique or improper motive or ulterior purpose. The administrative action must be said to be done in good faith, if it is in fact done honestly, whether it is done negligently or not. An act done honestly is deemed to have been done in good faith.
Mala fides means want of good faith, personal bias, grudge, oblique or improper motive or ulterior purpose. The administrative action must be said to be done in good faith, if it is in fact done honestly, whether it is done negligently or not. An act done honestly is deemed to have been done in good faith. An administrative authority must, therefore, act in a bona fide manner and should never act for an improper motive or ulterior purposes or contrary to the requirements of the statute, or the basis of the circumstances contemplated by law, or improperly exercised discretion to achieve some ulterior purpose. The determination of a plea of mala fide involves two questions, namely (i) whether there is a personal bias or an oblique motive, and (ii) whether the administrative action is contrary to the objects, requirements and conditions of a valid exercise of administrative power.” 51. The action taken must, therefore, be proved to have been made mala fide for such considerations. Mere assertion or a vague or bald statement is not sufficient. It must be demonstrated either by admitted or proved facts and circumstances obtainable in a given case. If it is established that the action has been taken mala fide for any such considerations or by fraud on power or colourable exercise of power, it cannot be allowed to stand.” 27. The allegations of mala fides would require a high degree of proof to rebut presumption that administrative action has been taken bona fide was laid down as one of the principles governing burden of proof of allegations of mala fides levelled by an aggrieved party. The Supreme Court in that decision observed thus:— “…. It is well settled that the burden of proving mala fide is on the person making the allegations and the burden is ‘very heavy’. (vide E.P. Royappa v. State of T.N. [ 1974 (4) SCC 3 ]. 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 fide are often more easily made than made out and the very seriousness of such allegations demands proof of a high degree of credibility.
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 fide are often more easily made than made out and the very seriousness of such allegations demands proof of a high degree of credibility. As Krishna Iyer, J. stated in Gulam Mustafa v. State of Maharashtra [ 1976 (1) SCC 800 ] : ‘It (mala fide) is the last refuge of a losing litigant.” 28. The Supreme Court in State of M.P. and Ors. v. Nandlal Jaiswal and Ors., (1986) 4 SCC 566 , laid emphasis on the need for furnishing full particulars of allegations suggesting mala fides. The use of words such as ‘mala fides’, ‘corruption’ and ‘corrupt practice’ was held to be insufficient to necessitate an enquiry into such allegations. The Court observed:- “39. Before we part with this case we must express our strong disapproval of the observations made by B.M. Lal, J. in Paras 1, 9, 17, 18, 19 and 34 of his concurring opinion. The learned Judge made sweeping observations attributing mala fides, corruption and underhand dealing to the State Government. These observations are in our opinion not at all justified by the record. In the first place it is difficult to appreciate how any such observation could be made by the learned Judge without any foundation for the same being laid in the pleadings. It is true that in the writ petitions the petitioners used words such as ‘mala fide’, ‘corruption’ and ‘corrupt practice’ but the use of such words is not enough. What is necessary is to give full particulars of such allegations and to set out the material facts specifying the particular person against whom such allegations are made so that he may have an opportunity of controverting such allegations. The requirement of law is not satisfied insofar as the pleadings in the present case are concerned and in the absence of necessary particulars and material facts, we fail to see how the learned Judge could come to a finding that the State Government was guilty of factual mala fides, corruption and underhand dealing.” 29. To the same effect is the decision of the Supreme Court in Smt. Swaran Lata v. Union of India & Ors., (1979) 3 SCC 165 .
To the same effect is the decision of the Supreme Court in Smt. Swaran Lata v. Union of India & Ors., (1979) 3 SCC 165 . The Supreme Court held that in the absence of particulars, the Court would be justified in refusing to conduct an investigation into the allegations of mala fides. Even when the court examining validity of an action may find a circumstance to be disturbing, the Supreme Court in Minor A Paeeiakaruppan v. Sobha Joseph, (1971) 1 SCC 38 , held that it cannot uphold the plea of mala fides on the ground of mere probabilities. A note of caution was similarly sounded by the Supreme Court in E.P. Royappa v. State of T.N., (1974) 4 SCC 3 , where the Supreme Court held that it ought to be slow to draw dubious inferences from incomplete facts particularly when imputations are grave and they are made against the holder of an office which has high responsibility in the administration. The following passage from the decision is apposite:— “92. Secondly, we must not also overlook that the 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 demands proof of a high order of credibility. Here the petitioner, who was himself once the Chief Secretary, has flung a series of charges of oblique conduct against the Chief Minister. That is in itself a rather extraordinary and unusual occurrence and if these charges are true, they are bound to shake the confidence of the people in the political custodians of power in the State, and therefore, the anxiety of the Court should be all the greater to insist on a high degree of proof. In this context it may be noted that top administrators are often required to do acts which affect others adversely but which are necessary in the execution of their duties. These acts may lend themselves to misconstruction and suspicion as to the bona fides of their author when the full facts and surrounding circumstances are not known. The Court would, therefore, 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.
The Court would, therefore, 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. Such is the judicial perspective in evaluating charge of unworthy conduct against ministers and other high authorities, not because of any special status which they are supposed to enjoy, nor because they are highly placed in social life or administrative set up-these considerations are wholly irrelevant in judicial approach-but because otherwise, functioning effectively would become difficult in a democracy. It is from this standpoint that we must assess the merits of the allegations of mala fides made by the petitioner against the second respondent.” 30. As pointed out elsewhere in this judgment, we must not discount and ignore that while issuing notice inviting tender, respondent JKPCC had given relaxation to the contractors of J&K State as regards average annual turnout of civil works over last five years from 40% to 33%. Similarly, in respect of provision for experience in successfully completing or substantially completing at least one contract of highway (road and/or bridge works)/airport runway has been reduced from 40% of the value of the proposed contract within the last five years to 33%. In case of Batch type MHP with electronic controls has been relaxed from 80-100 TPH capacity to 40-60 TPH capacity. Not only this, the existing provision for bidder to furnish the proposal, if any, for subcontracting of work costing is 10% of the bid amount whereas respondent JKPCC has relaxed it by making a provision in notice inviting tender that bidder of J&K State is allowed to subcontract for no mechanized works i.e. earthwork, sub-base work, and minor CD (HP/Culverts) costing upto 50% of the bid amount to encourage local participation. For those reasons, writ petition in hand does not provide specific particulars or details of how the decision of respondent JKPCC qua impugned condition is pregnant with mala fide. The averments made in writ petition in that regard appeared to be general and inferential in nature. Such allegations are, in my opinion, insufficient to hold the charge of mala fide levelled against respondent JKPCC proved. 31.
The averments made in writ petition in that regard appeared to be general and inferential in nature. Such allegations are, in my opinion, insufficient to hold the charge of mala fide levelled against respondent JKPCC proved. 31. Learned counsel for petitioner’s submission is that looking to the condition contained in notice inviting tender, impugned in this petition, individual players, like petitioner, would be edged out and would not have a level playing field in the tender process. I am unable to agree with this submission. As pointed out earlier, respondent JKPCC has given level playing field to local participation by relaxing the various conditions to encourage local contractors to partake in the tender process. This being the case, I am unable to agree with learned counsel for petitioner that impugned condition would edge out an individual who wishes to take part in tender process. Furthermore, I find that the condition(s) is/are aimed to attract reputed players in the field to achieve the objectives of the project and therefore cannot be said to be unreasonable, discriminatory or arbitrary. These terms and conditions appears to have been incorporated after due deliberation and by an expert body of respondent JKPCC, after taking all factors taken into consideration and I do not think the same require any interference. 32. It may not be out of place to mention here that this Court cannot sit as a court of appeal as this Court does not have the expertise to correct the decision of respondent JKPCC vis-à-vis impugned condition of notice inviting tender inasmuch as reviewing the decision of respondent JKPCC as to impugned condition, would be substituting its own decision, without necessary expertise that itself may be fallible. This Court cannot scuttle or strangulate the freedom of contract of respondent JKPCC. Moreover, petitioner, as pointed out by learned senior counsel for respondents, has approached this Court in December 2016, when the opening of technical bids was fixed on 2nd November, 2016. Petitioner, it may not be out of place to mention here, has knocked at portals of this Court with writ petition on hand on 29th November 2016, whereas NIT was issued on 25th July, 2016 and last date for submission of online tenders was 26th October 2016. This again shows that afterthought prevailed upon petitioner to approach this Court.
Petitioner, it may not be out of place to mention here, has knocked at portals of this Court with writ petition on hand on 29th November 2016, whereas NIT was issued on 25th July, 2016 and last date for submission of online tenders was 26th October 2016. This again shows that afterthought prevailed upon petitioner to approach this Court. As a result, the respondent JKPCC could not finalise the tender process and issue allotment in favour of successful tenderer/bidder. 33. Applying foregoing parameters to the case at bar, this Court finds that the condition(s) contained in the NIT, impugned in the instant writ petition, are immune from judicial review. Reliance is also placed on the decisions rendered by the Apex Court in M/s Michigan Rubber (India) Ltd. case (supra), State of Jharkhand and Ors. v. Cwe-Soma Consortium, AIR 2016 SC 3366 , as also Tamil Nadu Generation and Distribution Corporation Ltd. (TANGEDCO) and another v. CSEPDI – Trishe Consortium and another, AIR 2016 SC 4879 . 34. In view of aforesaid analysis, specially in absence of mala fide, prejudice, unreasonableness, arbitrariness, or impugned condition(s) being against public interest, the impugned condition(s) contained in notice inviting tenders issued by respondent JKPCC vide e-NIT No.JKPCC/U-4th/J/ 02 of 2016-17 dated 25th July 2015, need not be interfered with by this Court, is/are immune from judicial review in the given facts and circumstances. As a corollary, writ petition is devoid of any merit. 35. For all what has been discussed above, writ petition is dismissed. Interim direction(s) is/are vacated. 36. Having regard to the peculiar facts of the case, the parties are left to bear their individual costs.