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2017 DIGILAW 246 (TRI)

Tripura Tubes Private Ltd. v. State of Tripura

2017-05-30

S.TALAPATRA

body2017
JUDGMENT & ORDER : By means of this writ petition, the petitioner which is a company registered under the Companies Act and a local SSI Unit manufacturing UPVC pipes having IS No.4985:2000 with latest amendment IS:1024:1988(P-2) with ISI mark has challenged the Supply Order under No.F.EE/RD/TECH/1(Pt-XXV1) dated 13.04.2017, Annexure-9 to the writ petition. The petitioner has further urged this court to direct the respondent No.3 to issue the supply order in respect of the items, materials which are the subject matter of Notice Inviting Tender, the NIT in short, under No.03/EE/RD/2016-2017 dated 29.11.2016, Annexure-4 to the writ petition, in favour of the petitioner. For purpose of reference, the description of the UPVC pipes and Couplers is extracted hereunder from the said NIT dated 29.11.2016. Sl. No. Description of supply Estimated Cost Earnest Money Time for completion 1 Procurement of UPVC pipes of different diameter & Pressure for WR Schemes in Tripura under MGNREGA during the year 2016-2017 Rs.3,77,80,302/- Rs.3,77,803/- 4 (Four) Months. 2. The facts which are not disputed are that the respondent No.3, the Executive Engineer, Resource Division, Panchamukh did not incorporate any clause in terms of the Tripura Industrial Investment Promotion Incentive Scheme, 2012, the Incentive Scheme in short, as published by the notification under No. F.DI/SUB/TIIS/4-2(21)/2012/4750-64 dated 26.03.2012 in the said NIT. In the said incentive scheme a procurement preference benefit has been incorporated for purpose of promoting the eligible enterprises. There is no dispute that the petitioner is one of the eligible enterprises. For further reference, the said procurement preference clause in the incentive scheme is reproduced. “8. Procurement Preference 8.1 Subject to their meeting the quality, delivery and other specifications of the purchasing State Government Agencies, Procurement Preference will be given on all purchases by State Government Agencies – including Departments/Corporations/Public Sector Enterprises/Autonomous Bodies/Aided Institutions of the State Government – on products manufactured in Tripura by eligible enterprises. 8.2 The procurement preference would be applicable in case of items being procured through tendering process by the State Government Agencies. For extension of procurement preference, the landed price of the item being procured shall be calculated, for all the eligible tenderers, at the destination specified by the purchaser, before the imposition of Tripura Value Added Tax or any other applicable commodity taxes under relevant Acts of the State Government on the final purchase by the State Government Agencies. For extension of procurement preference, the landed price of the item being procured shall be calculated, for all the eligible tenderers, at the destination specified by the purchaser, before the imposition of Tripura Value Added Tax or any other applicable commodity taxes under relevant Acts of the State Government on the final purchase by the State Government Agencies. The landed price would, however, include value added tax in the State of origin, excise duty, insurance charges, freight costs and Central Sales Tax imposed prior to the goods entering the State of Tripura, quoted by supplier located outside Tripura. 8.3 The procurement purchase for enterprises in Tripura shall operate as follows: (a) In cases where after comparison of the landed price of all eligible tenderers, one or more local industrial enterprises emerge as the first lowest tenderer, the said enterprises shall be eligible to get supply order for 100% of the tendered quantity of the item being procured by the State Government Agencies. (b) In cases where after comparison of the landed price of all eligible tenderers, the first lowest tenderer is an enterprise from outside the State; but the price of one or more local industrial enterprises is not over 15% of the price quoted by the first lowest tenderer, the said local industrial enterprises shall be eligible to get supply order for 100% of the tendered quantity of the item being procured by the State Government Agencies, except in case of cement, steel and GCI sheet, where 65:35 ratio for local/outside bidders will be followed, provided that they shall be ready to supply the same by matching the price offered by the first lowest tenderer. 8.4 In order to be eligible for benefits under this clause, an enterprise shall have to achieve at least 30% value addition within the State, to be ascertained in the manner as may be prescribed by the State Government. “Value Addition” for this purpose would mean the difference between the total landed cost (in 12 Tripura) of all inputs used in production and the selling price for every unit of the item being procured. “Value Addition” for this purpose would mean the difference between the total landed cost (in 12 Tripura) of all inputs used in production and the selling price for every unit of the item being procured. 8.5 Notwithstanding anything contained in Clause 4 & 5 of the Scheme-2012, the incentive under this clause shall be available to all the local enterprises irrespective of their date of commencement of commercial production; i.e., enterprises who started commercial production, prior to 1st April, 2012 shall also be eligible for benefit under this clause, subject to fulfilment of other eligibility conditions. 8.6 The provisions under Procurement Preference at Clause 8.4 has been modified vide Notification No.F.DI/TIS/SUB/4-2(21)2006/P-III/13165-274 dated. 23rd July, 2015. The details of the provisions notified are given at Annexure-I.” [Emphasis added] 3. By the memorandum No.F.1-1(9)/DI/MSME/2011/Vol-III/11542-52 dated 09.08.2011, whereby the Principal Secretary, Department of Industries and Commerce, Government of Tripura has observed and clarified inter alia as under: “(b) Avoiding stipulation of restrictive conditions in tenders: It has been seen that in some cases the procuring Departments are stipulating technical eligibility conditions regarding turnover, production capacity etc, which disqualifies the small local units from participating the tender. In this connection, the Ministry of Micro, Small & Medium Enterprises (MSME) had issued clear instruction vide their letter F.No.22(1)/2003/EP&M dated 29.07.2003 (which have been reiterated from time to time) clearly stipulating that no such condition stipulating minimum turnover limit, amount of purchase orders executed earlier etc. should be prescribed in the tender, as a result of which the small units are disqualified even for participation. Accordingly, the Departments are once again requested to refrain from stipulating conditions in tenders which disqualify local units from participating in various tenders. The local units must be assessed on the basis of the quality of their products and price offered and no other parameters would be laid down in the tenders.” 4. The petitioner has admitted that in Para-12 of the writ petition that the respondent No.2 has rejected the tender of the petitioner. When the writ petition was filed on 10.03.2017, the supply order under No. F.EE/RD/TECH-I(Pt-XXVI) dated 13.04.2017 was not issued in favour of M/s. Skipper Ltd., Kolkata, the respondent No.5. The petitioner has admitted that in Para-12 of the writ petition that the respondent No.2 has rejected the tender of the petitioner. When the writ petition was filed on 10.03.2017, the supply order under No. F.EE/RD/TECH-I(Pt-XXVI) dated 13.04.2017 was not issued in favour of M/s. Skipper Ltd., Kolkata, the respondent No.5. But subsequently, the writ petition has been amended by the petitioner in terms of the order dated 25.04.2017 delivered in I.A.537 of 2017 [in W.P.(C) 268 of 2017] and the respondent No.5 has been added in terms of the order dated 25.04.2017 delivered in I.A.536 of 2017 [in W.P.(C) 268 of 2017]. The said supply order has been challenged on the ground that if the procurement preference under Incentive Scheme, 2012, a truncated copy of which is available as the Annexure-R/10 to the rejoinder, would have applied and which is bound to be applied, the petitioner has contended that without procurement preference so far the quoted rate is concerned, the petitioner is the second lowest bidder [L.2] and the respondent No.5 is the first lowest bidder [L.1]. But if 15% procurement preference is allowed, which according to the petitioner is liable to be added it would have been the opposite. In para-7 of the rejoinder filed on 11.05.2017, the petitioner has averred that the quoted value of the first lowest tenderer M/s. Skipper Ltd. is Rs. 4,01,12,919.97 and quoted value of the petitioner is Rs. 4,15,15,749/- and thus, there is a difference for Rs. 14,02,829/- between L1 and L2. If 15% procurement preference was considered, the tender of the petitioner was the lowest one. The petitioner would have been provided a calculation in the rejoinder in the following manner: CALCULATION (a) Rate quoted by respondent No.5 Rs. 4,01,12,919.17 (b) 15% of the said amount comes to Rs. 60,16,438 (rounded) (c) Total amount of a + b Rs. 4,61,29,856/- (d) Rate quoted by the petitioner Rs. 4,15,15,749/- (e) Difference between c-d Rs. 46,14,107/- 5. In the premises that the petitioner is entitled to procurement preference and on applying procurement preference quotient the petitioner becomes the L1 and hence, awarding the supply order in terms of NIT dated 29.11.2016 in favour of the respondent No.5 is wholly arbitrary and violative of Article 14 of the Constitution of India. 46,14,107/- 5. In the premises that the petitioner is entitled to procurement preference and on applying procurement preference quotient the petitioner becomes the L1 and hence, awarding the supply order in terms of NIT dated 29.11.2016 in favour of the respondent No.5 is wholly arbitrary and violative of Article 14 of the Constitution of India. The petitioner’s main grievance emanates from non-application Inventive Scheme, 2012 so far 15% procurement preference and exemption from restrictive clause like proven performance are concerned. The petitioner’s tender cannot be rejected for not submitting 3(three) years proven performance certificate of product in preceding 5(five) years to the tender. Thus, the petitioner has stated that the respondent No.3 by issuing the supply order in favour of the respondent No.5 rejecting the tender of the petitioner has acted not for any genuine legal or bonafide reason but arbitrarily, unreasonably, mala-fide and unconstitutionally. Hence, interference of this court is warranted in undoing the injustice done to the petitioner. 6. The respondents No.1 to 4 by filing a combined reply have stated that the memorandum dated 09.08.2011, the Incentive Scheme is neither a government policy nor a promise. It is a mere advice to the government departments for ensuring some concessions to small and medium enterprises to encourage the small and medium industries in the state. The advice, according to the respondents No.1 to 4, is entirely different from a promise. These are mere guidelines, not mandatory directives. According to those respondents, a reason for not considering the tender of the petitioner is that the petitioner had not fulfilled the requirement as embodied in the Clause 28 of the NIT which is in consonance with the Tripura PWD Manual published in Tripura gazette dated 07.06.2007 and the said manual has become effective from 06.06.2007. Thus, those respondents have categorically denied any violation of the policy of the government by inserting the Clause 28 of the NIT. In Para-12 of the reply, the respondents No.1 to 4 have stated as under: “12. That, in reply to the averments and/or contentions made in Paragraph No.7 of the Writ Petition I state that the petitioner was not eligible to participate in the tender process due to non-fulfilment of condition-28 of the NIT. But the petitioner company participated in the tender process by dropping tender. That, in reply to the averments and/or contentions made in Paragraph No.7 of the Writ Petition I state that the petitioner was not eligible to participate in the tender process due to non-fulfilment of condition-28 of the NIT. But the petitioner company participated in the tender process by dropping tender. According the tender, therefore, could not be accepted for the non-fulfilment of the conditions as per NIT.” The respondents No.1 to 4 in continuance thereof, have further stated that the said Clause 28 is in consonance with the ‘eligibility criteria’ of the said manual. The said eligibility criteria do not have any relation with the procurement performance price to the tune of 15% or exemption of payment of earnest money and security deposit. The said certificate provides inputs about the turnover production capacity of a manufacturer and also of the quantum of the business previously transacted. Thus, the proven performance certificate is the credential of quality of goods supplied by a manufacturer in the past. There is no dispute that the petitioner could not file the required proven performance certificate in terms of Clause 28 of the NIT dated 29.11.2016, Annexure-4 to the writ petition. Thus, the petitioner was declared ineligible to participate in the tender. Two other companies were declared ineligible alike in the process. 7. By filing the rejoinder, the petitioner has stoutly advanced the plea that the respondent No.4 by the letter dated 08.02.2017, Anenxure-7 to the writ petition, in response to the letter dated 03.02.2017, Annexure-6 to the writ petition, has clarified how the quality of goods manufactured by local SSI Units shall be assessed during the procurement. The petitioner has challenged the procedure adopted by issuing the notice of demand dated 04.03.2017. On scrutiny of the letter dated 08.02.2017, it appears to this court that there is no specific direction but only advice to the respondent No.3 and hardly is of any relevance in the present context. For purpose of reference, Clause 28 of the NIT dated 29.11.2016 is reproduced hereunder: “28. The manufacturer having the manufacturing license of UPVC pipes as per IS:4985:2000 with latest amendments IS:10124:1988 (P-2) with ISI Mark if any and also having at least 3(Three) years proven performance certificate of product with in preceding 5(Five) years prior to this tender is entitled to compete this tender. The manufacturer having the manufacturing license of UPVC pipes as per IS:4985:2000 with latest amendments IS:10124:1988 (P-2) with ISI Mark if any and also having at least 3(Three) years proven performance certificate of product with in preceding 5(Five) years prior to this tender is entitled to compete this tender. The certificate should be issued by an officer not below the rank of Executive Engineer of Central/State Government Department, Government Organisation and PSUs.” 8. From the rival contentions as reflected in the averments and from the records so produced by the writ petitioner, the following questions fall for response: (a) Whether the provision of the Incentive Scheme has binding effect on the respondent Nos.1 to 3? (b) Whether an eligible unit under the Incentive Scheme is entitled to get the benefits thereof, even if those are not made part of the NIT for knowledge of the other intending bidders who are not covered by the Incentive Scheme? (c) Whether the memorandum dated 09.08.2011, Annexure-3 to the writ petition, can automatically substitute the clauses of the tender? (d) When the petitioner is found ineligible for non-compliance of Clause 28 of the NIT, can he maintain the writ petition challenging the supply order dated 13.04.2017, Annexure-9 to the writ petition, issued in favour of the respondent No.5? It is to be noted that the respondent No.5 by filing his reply has broadly supported the respondents No.1 to 4. However, they have raised one further issue that whether the judicial review should be extended to the administrative action in respect of the commercial transaction. Even though the respondent No.5 has raised that the other bidders whose tenders are admittedly been rejected being ineligible as stated above, should have been made party in this proceeding. Such plea is rejected inasmuch as an ineligible bidder, who has accepted the decision to that effect, cannot be permitted to say anything in respect of the final decision taken in terms of the NIT. The respondent No.5 has entirely supported the stand taken by the official respondents that since the petitioner could not submit the required proved performance certificate, he cannot be treated as eligible bidder. Moreover, there is no challenge against the Clause 28 of the NIT which is an essential condition of the NIT. In absence of such proven performance certificate the capability of any bidder cannot be assessed. Moreover, there is no challenge against the Clause 28 of the NIT which is an essential condition of the NIT. In absence of such proven performance certificate the capability of any bidder cannot be assessed. Further, the respondent No.5 raised an objection that after participating in the tender without demur now the petitioner cannot challenge the said process even in respect of the procurement preference. 9. Mr. S.M. Chakraborty, learned senior counsel appearing for the petitioner has submitted that if the procurement preference in terms of the Incentive Scheme, 2012 is provided to the petitioner as the petitioner is undoubtedly is an eligible enterprise to get such incentive, it is evident from the ‘calculation’ that the petitioner is entitled to be treated as L1. There is no other disability against the petitioner. Mr. Chakraborty, learned senior counsel has further submitted in sequel that the proven performance certificate cannot be insisted by the respondents in view of the memorandum dated 09.08.2011, Annexure-3 to the writ petition, where it has been stated that no such condition stipulating minimum turnover limit, amount of purchase order executed earlier etc. should be prescribed in the tender as a result of which the small units are disqualified even from participation. The respondents No.1 to 3 should have refrained them from stipulating clause 28 as the essential condition which ultimately has disqualified the petitioner, a local unit from effectively participating in the tender. Mr. Chakraborty, learned senior counsel having referred to the memorandum dated 09.08.2011 has also contended that the local units must be assessed on the basis of the quality of their products and the price offered and no other parameters would be laid down in the tenders. Finally, Mr. Chakrabory, learned senior counsel has referred to the letter dated 08.02.2017 issued by the Director Industries and Commerce, Annexure-7 to the writ petition, to repeat his contention that the help of the specialist agencies could have been taken to ascertain the product quality. 10. In reply, Mr. B.C. Das, learned Advocate General appearing for the respondents No.1 to 4 has stated that a tender is decided giving all sanctity to the procedure as noted in the tender not beyond that. Before embarking on the core issues, Mr. Das, learned Advocate General has categorically stated that the Incentive Scheme is a state policy, directory in nature, but not obligatory for any department. Before embarking on the core issues, Mr. Das, learned Advocate General has categorically stated that the Incentive Scheme is a state policy, directory in nature, but not obligatory for any department. To encourage the local enterprises that policy has been adopted. To give such benefit under the said Incentive Scheme, those provisions have to be laid in the NIT. The NIT dated 29.11.2016 has been framed in terms of the PWD Manual which has the binding effect on all the departments under the purview of the said manual. Clause 28 of the NIT has been grafted from the said manual. That apart, Mr. Das, learned Advocate General has submitted that since the petitioner did not submit 3(three) years’ proven performance certificate of product within preceding five years prior to the tender issued by an officer not below the rank of the Executive Engineer of Central/State Government Department, Government Organisation and PSUs, the petitioner’s tender has been declared informal. Hence, the petitioner has no right unless it is proved that he has fulfilled all the requirements of the NIT. Mr. Das, learned Advocate General has submitted that even in the rejoinder the petitioner did not invest any word in this regard only mentioned of the memorandum dated 09.08.2011, Annexure-3 to the writ petition. Mr. Das, learned Advocate General having referred to Para-B of the memorandum dated 09.08.2011 as reproduced above, has stated that the said advisory is for refraining the departments from incorporating any condition stipulating minimum turnover limit, amount of purchase order executed earlier order etc. in the tender. The said memorandum dated 09.08.2011, according to Mr. Das, learned Advocate General, is again not binding on the respondent No.3. However, Mr. Das, learned Advocate General has admitted that if the advisory is decided to be followed that has to be done at the threshold by providing such conditions as laid down in the memorandum dated 09.08.2011 or by incorporating the procurement preference clause in the NIT itself. Mr. Das, learned Advocate General thereafter has urged this court not to interfere in the process in any manner as the supply order has been issued following the fair and transparent procedure having due regard to the element of public interest. Mr. Das, learned Advocate General has placed reliance on a few decisions of the apex court on the scope and ambit of judicial review in a matter relating to a commercial tender. Mr. Das, learned Advocate General has placed reliance on a few decisions of the apex court on the scope and ambit of judicial review in a matter relating to a commercial tender. In Raunaq International Ltd. vs. I.V.R. Construction Ltd. and others, reported in (1999) 1 SCC 492 , the apex court has observed as under: “9. The award of a contract, whether it is by a private party or by a public body or the State, is essentially a commercial transaction. In arriving at a commercial decision considerations which are of paramount importance are commercial considerations. These would be : (1) The price at which the other side is willing to do the work; (2) Whether the goods or services offered are of the requisite specifications; (3) Whether the person tendering has the ability to deliver the goods or services as per specifications. When large works contracts involving engagement of substantial manpower or requiring specific skills are to be offered, the financial ability of the tenderer to fulfil the requirements of the job is also important; (4) the ability of the tenderer to deliver goods or services or to do the work of the requisite standard and quality; (5) past experience of the tenderer, and whether he has successfully completed similar work earlier; (6) time which will be taken to deliver the goods or services; and often (7) the ability of the tenderer to take follow up action, rectify defects or to give post contract services. Even when the State or a public body enters into a commercial transaction, considerations which would prevail in its decision to award the contract to a given party would be the same. However, because the State or a public body or an agency of the State enters into such a contract, there could be, in a given case, an element of public law or public interest involved even in such a commercial transaction. 10. What are these elements of public interest ? (1) Public money would be expended for the purposes of the contract; (2) The goods or services which are being commissioned could be for a public purpose, such as, construction of roads, public buildings, power plants or other public utilities. (3) The public would be directly interested in the timely fulfilment of the contract so that the services become available to the public expeditiously. (3) The public would be directly interested in the timely fulfilment of the contract so that the services become available to the public expeditiously. (4) The public would also be interested in the quality of the work undertaken or goods supplied by the tenderer. Poor quality of work or goods can lead to tremendous public hardship and substantial financial outlay either in correcting mistakes or in rectifying defects or even at times in re-doing the entire work - thus involving larger outlays or public money and delaying the availability of services, facilities or goods. e.g. A delay in commissioning a power project, as in the present case, could lead to power shortages, retardation of industrial development, hardship to the general public and substantial cost escalation. 11. When a writ petition is filed in the High court challenging the award of a contract by a public authority or the State, the court must be satisfied that there is some element of public interest involved in entertaining such a petition. If, for example, the dispute is purely between two tenderers, the court must be very careful to see if there is any element of public interest involved in the litigation. A mere difference in the prices offered by the two tenderers may or may not be decisive in deciding whether any public interest is involved in intervening in such a commercial transaction. It is important to bear in mind that by court intervention, the proposed project may be considerably delayed thus escalating the cost far more than any saving which the court Would ultimately effect in public money by deciding the dispute in favour of one tenderer or the other tenderer. Therefore, unless the court is satisfied that there is a substantial amount of public interest, or the transaction is entered into mala fide the court should not intervene under Article 226 in disputes between two rival tenderers.” 11. In Association Registration Plates vs. Union of India and others, reported in (2005) 1 SCC 679 , where the apex court has held as under: “35. Taking up first the challenge to the impugned conditions in the Notices Inviting Tenders issued by various State authorities, we find sufficient force in submissions advanced on behalf of the Union and the State authorities and the contesting manufacturers. The State as the implementing authority has to ensure that scheme of high security plates is effectively implemented. Taking up first the challenge to the impugned conditions in the Notices Inviting Tenders issued by various State authorities, we find sufficient force in submissions advanced on behalf of the Union and the State authorities and the contesting manufacturers. The State as the implementing authority has to ensure that scheme of high security plates is effectively implemented. Keeping in view the enormous work involved in switching over to new plates within two years for existing vehicles of such large numbers in each State, resort to 'trial and error' method would prove hazardous. Its concern to get the right and most competent person cannot be questioned. It has to eliminate manufacturers who have developed recently just to enter into the new field. The insistence of the State to search for an experienced manufacturer with sound financial and technical capacity cannot be misunderstood. The relevant terms and conditions quoted above are so formulated to enable the State to adjudge the capability of a particular tenderer who can provide a fail-safe and sustainable delivery capacity. Only such tenderer has to be selected who can take responsibility for marketing, servicing and providing continuously the specified plates for vehicles in large number firstly in initial two years and annually in the next 13 years. The manufacturer chosen would, in fact, be a sort of an agent or medium of the RTOs concerned for fulfillment of the statutory obligations on them of providing high security plates to vehicles in accordance with rule 50. Capacity and capability are two most relevant criteria for framing suitable conditions of any Notices Inviting Tenders. The impugned clauses by which it is stipulated that the tenderer individually or as a member of joint- venture must have an experience in the field of registration plates in at least three countries, a common minimum net worth of Rs. 40 crores and either joint-venture partner having a minimum annual turnover of at least Rs. 50 crores and a minimum of 15% turnover of registration plates business have been, as stated, incorporated as essential conditions to ensure that the manufacturer selected would be technically and financially competent to fulfill the contractual obligations which looking to the magnitude of the job requires huge investment qualitatively and quantitatively. 36. In the course of hearing, it could not be seriously disputed by the parties that technical know-how for the high security registration plates is outside the country. 36. In the course of hearing, it could not be seriously disputed by the parties that technical know-how for the high security registration plates is outside the country. It is true that many indigenous manufacturers are in a position to supply the plates on the basis of technical assistance available in and outside the country. There are many tenderer who possess Type Approval Certificates [TACs] but to ensure major quantity of supply in initial two years and periodical supply for new vehicles for a long period, only a manufacturer who is sound both technically and financially, is required. Learned Brother G. P. Mathur J., in his elaborate opinion expressed by him [See Assn. of Registration Plates vs. Union of India : (2004) 5 SCC 364 ] found a serious vice in the tender conditions that they necessarily intend to promote such companies which have foreign collaborations and exclude indigenous manufacturers. 37. It is not controverted that the technical 'know-how' for the manufacture of high security registration plates presently is available outside India. Technically and financially, competent indigenous manufacturers are mostly those who are in collaborations with foreign companies engaged in such manufacturing activities. The scheme contemplated under rule 50 of registration plates is a new experiment for India. In the initial stages of its implementation, tender conditions encouraging such manufacturers who are in foreign collaborations cannot be held to be discriminatory to indigenous manufacturers. Keeping in view the nature of the contract and job involved particularly its magnitude and the huge investment for infrastructure required, attempt to select such manufacturer - may be having collaboration with foreign companies and experience in foreign countries cannot be held to be a deliberate attempt on the part of the State authorities to eliminate indigenous manufacturers. 38. In the matter of formulating conditions of a tender document and awarding a contract of the nature of ensuring supply of high security registration plates, greater latitude is required to be conceded to the State authorities. Unless the action of tendering Authority is found to be malicious and misuse of its statutory powers, tender conditions are unassailable. On intensive examination of tender conditions, we do not find that they violate the equality clause under Article 14 or encroach on fundamental rights of a class of intending tenderer under Article 19 of the Constitution. Unless the action of tendering Authority is found to be malicious and misuse of its statutory powers, tender conditions are unassailable. On intensive examination of tender conditions, we do not find that they violate the equality clause under Article 14 or encroach on fundamental rights of a class of intending tenderer under Article 19 of the Constitution. On the basis of the submissions made on behalf of the Union and State authorities and the justification shown for the terms of the impugned tender conditions, we do not find that the clauses requiring experience in the field of supplying registration plates in foreign countries and the quantum of business turnover are intended only to keep out of field indigenous manufacturers. It is explained that on the date of formulation of scheme in rule 50 and issuance of guidelines thereunder by Central Government, there were not many indigenous manufacturers in India with technical and financial capability to undertake the job of supply of such high dimension, on a long term basis and in a manner to ensure safety and security which is the prime object to be achieved by the introduction of new sophisticated registration plates.” [Emphasis added] 12. In Master Marine Services (P) Ltd. vs. Metcalfe & Hodgkinson (P) Ltd. and another, reported in (2005) 6 SCC 138 , the apex court has enunciated as under: “11. The principles which have to be applied in judicial review of administrative decisions, especially those relating to acceptance of tender and award of contract, have been considered in great detail by a three Judge Bench in Tata Cellular v. Union of India : AIR 1996 SC 11 . It was observed that the principles of judicial review would apply to the exercise of contractual powers by Government bodies in order to prevent arbitrariness or favouritism. However, it must be clearly stated that there are inherent limitations in exercise of that power of judicial review. Government is the guardian of the finances of the State. It is expected to protect the financial interest of the State. The right to refuse the lowest or any other tender is always available to the Government. But, the principles laid down in Article 14 of the Constitution have to be kept in view while accepting or refusing a tender. Government is the guardian of the finances of the State. It is expected to protect the financial interest of the State. The right to refuse the lowest or any other tender is always available to the Government. But, the principles laid down in Article 14 of the Constitution have to be kept in view while accepting or refusing a tender. There can be no question of infringement of Article 14 if the Government tries to get the best person or the best quotation. The right to choose cannot be considered to be an arbitrary power. Of course, if the said power is exercised for any collateral purpose the exercise of that power will be struck down. 12. After an exhaustive consideration of a large number of decisions and standard books on Administrative Law, the Court enunciated the principle that the modern trend points to judicial restraint in administrative action. The Court does not sit as a court of appeal but merely reviews the manner in which the decision was made. 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. The Government must have freedom of contract. In other words, a fairplay in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasi- administrative sphere. However, the decision must not only be tested by the application of Wednesbury principles of reasonableness but must be free from arbitrariness not affected by bias or actuated by mala fides. It was also pointed out that quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure. * * * 14. In Raunaq International Ltd. v. I.V.R. Construction Ltd. : (1999) 1 SCC 492 it was observed that the award of a contract, whether it is by a private party or by a public body or the State, is essentially a commercial transaction. In arriving at a commercial decision, considerations which are of paramount importance are commercial considerations, which would include, inter alia, the price at which the party is willing to work, whether the goods or services offered are of the requisite specifications and whether the person tendering is of ability to deliver the goods or services as per specifications. 15. In arriving at a commercial decision, considerations which are of paramount importance are commercial considerations, which would include, inter alia, the price at which the party is willing to work, whether the goods or services offered are of the requisite specifications and whether the person tendering is of ability to deliver the goods or services as per specifications. 15. The law relating to award of contract by State and public sector corporations was reviewed in Air India Ltd. v. Cochin International Airport Ltd. : (2000) 2 SCC 617 and it was held that the award of a contract, whether by a private party or by a State, is essentially a commercial transaction. It can choose its own method to arrive at a decision and it is free to grant any relaxation for bona fide reasons, if the tender conditions permit such a relaxation. It was further held that 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 powers 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 interfere.” [Emphasis added] 13. In Michihgan Rubber (India) Limited vs. State of Karnataka and others, reported in (2012) 8 SCC 216 , where the apex court has held as under: “23. From the above decisions, the following principles emerge: (a) The 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. 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. 24. 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. If the answers to the above questions are in negative, then there should be no interference under Article 226. 25. Respondent No.1, the State, in their counter affidavit, highlighted that tyre is very critical and a high value item being procured by the KSRTC and it procured 900 x 2014 Ply Nylon tyres along with the tubes and flaps in sets and these types of tyres are being used only by the State Transport Units and not in the domestic market extensively. It is highlighted that the quality of the tyre plays a major role in providing safe and comfort transportation facility to the commuters.” [Emphasis added] 14. Mr. Das, learned Advocate General has also relied on a decision of the apex court in Sanjoy Kumar Shukla vs. Bharat Petroleum Corporation Ltd. and others, reported in (2014) 3 SCC 493 has held as under: “19. We have felt it necessary to reiterate the need of caution sounded by this Court in the decisions referred to hereinabove in view of the serious consequences that the entertainment of a writ petition in contractual matters, unless justified by public interest, can entail. Delay in the judicial process that seems to have become inevitable could work in different ways. Deprivation of the benefit of a service or facility to the public; escalating costs burdening the public exchequer and abandonment of half completed works and projects due to the ground realities in a fast-changing economic/market scenario are some of the pitfalls that may occur.” 15. Mr. Das, learned Advocate General has finally submitted that the state is bound to adhere to norms, standard and procedure laid down by them in the NIT and cannot depart from them arbitrarily. The norms, standards and procedures must be adverted in the NIT clearly and transparently. Even if any provision of the manual is likely to be followed that must be noted in the NIT. 16. Mr. Somik Deb, learned counsel appearing for the respondent No.5 has also relied on a decision of the apex court in Jagadish Mandal vs. State of Orissa and others, reported in (2007) 14 SCC 517, where the apex court has observed after approvingly quoting from Sterling Computers Ltd. Vs. 16. Mr. Somik Deb, learned counsel appearing for the respondent No.5 has also relied on a decision of the apex court in Jagadish Mandal vs. State of Orissa and others, reported in (2007) 14 SCC 517, where the apex court has observed after approvingly quoting from Sterling Computers Ltd. Vs. M & N Publications Ltd., reported in (1993) 1 SCC 445 and Tata Cellular vs. Union of India, reported in (1994) 6 SCC 651 that when exercising the power of judicial review in respect of contracts entered into on behalf of the state, the courts are concerned primarily with as to whether there had been any infirmity in the decision making process and the court can certainly examine whether the decision making process was reasonable, rational and not arbitrary and violative of Article 14 of the Constitution. The court does not sit as a court of appeal but merely reviews the manner in which the decision was made. The court does not have the expertise to correct the administrative action. If a review of administrative decision is permitted it will be substituting its own decision without the necessary expertise which itself may be fallible. The government must have the freedom to contract. In other words, a fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasi-administrative sphere. However, the decision must not only be tested by the application of Wednesbury principle of reasonableness. 17. In an earlier decision, in Tripura Polymer Private Limited vs. The State of Tripura and others, [the judgment and order dated 28.03.2014 delivered in W.P.(C) No.09 of 2014] when the petitioner challenged a similar NIT he was declared informal. However, the decision must not only be tested by the application of Wednesbury principle of reasonableness. 17. In an earlier decision, in Tripura Polymer Private Limited vs. The State of Tripura and others, [the judgment and order dated 28.03.2014 delivered in W.P.(C) No.09 of 2014] when the petitioner challenged a similar NIT he was declared informal. The petitioner had challenged the award of the tender on the following grounds in the said process: “(i) The first point by Sri Kohinoor N. Bhattacharjee, is that the respondent No.5 did not have proper and valid BIS certification; (ii) the second point is that as per Clause 28, the tenderer also ought to have three years Proven Performance Certificate of product within the preceding five years and this certificate has not been produced by respondent No.5; and (iii) the last submission is that as per the terms of tender, the earnest money should have been in the form of Demand Draft valid for a period 6(six) months but the demand draft which was actually produced by respondent No.5 was only valid for 3(three) months.” 18. In response to the ground No. II above, this court has answered by observing as under: “10. As far as the performance clause is concerned, this is totally within the domain of the State to decide as to how it has to be satisfied with regard to the suitability of the successful tenderer to perform the contract.” 19. In the considered opinion of this court, the provision of the Incentive Scheme cannot have binding effect unless those are incorporated or adverted in the NIT inasmuch as the other intending bidders shall have the right to know all relevant factors which will be considered for determining the tender. The authority which floats the NIT is, therefore, bound to advert all such factors including the conditions to determine the tender for sake of fairness and transparency. No factor even if that may be part of any government policy can be considered by the authority unless such factor/condition is adverted in the NIT. Similarly, the memorandum dated 09.08.2011, Annexure-3 to the writ petition, cannot automatically substitute the clauses of the tender or cause super-session of any clause or condition of the tender in the name of encouraging the local enterprises. This court totally agrees with the submission of Mr. Similarly, the memorandum dated 09.08.2011, Annexure-3 to the writ petition, cannot automatically substitute the clauses of the tender or cause super-session of any clause or condition of the tender in the name of encouraging the local enterprises. This court totally agrees with the submission of Mr. Das, learned Advocate General that restriction or prohibition whatsoever as incorporated in the said memorandum dated 09.08.2011, unless reflected in the NIT, those factors, cannot be considered by the authority which floated the tender. Those factors, however, for benefit of the local enterprises can be made available by accommodating them in the NIT, not otherwise. In M/s Michigan Rubber (India) Ltd. (supra), the apex court has laid down certain principles, essential for determination of the tender. One of such principles is that certain pre-conditional qualifications for tenderer have to be laid down to ensure that the contractor has the capacity and the resources to successfully execute the work. Thus, the state cannot totally obliterate such condition in the NIT, else it would create a situation not transparent and not in conformity to the public interest. 20. As the petitioner has been found ineligible for non-compliance of the clause 28 of the NIT, the tender of the petitioner cannot be salvaged by invoking procurement preference under the Incentive Scheme or by the provisions made in the memorandum dated 09.08.2012. This court does not find any infirmity or lack of transparency in the process. It has been well laid in Jagdish Mandal (supra) that the principle of equity and natural justice stay at a distance in such transaction. 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. This Court does not find in any manner the respondents No.1, 2 & 3 have compromised with the public interest. The petitioner cannot be allowed to raise any such issue as the proven performance certificate has not been laid for consideration in terms of the NIT dated 29.11.2016. This Court does not find in any manner the respondents No.1, 2 & 3 have compromised with the public interest. The petitioner cannot be allowed to raise any such issue as the proven performance certificate has not been laid for consideration in terms of the NIT dated 29.11.2016. Having observed thus, this court finds that this writ petition is bereft of merit and accordingly, the same is dismissed. There shall be no order as to costs.