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2018 DIGILAW 471 (RAJ)

Mateshwari Construction Company v. Union Of India

2018-02-07

VIJAY BISHNOI

body2018
JUDGMENT Vijay Bishnoi, J —This writ petition has been filed by the petitioner essentially being aggrieved with the condition of experience specified in e-tender dated 15.01.2018 (Annexure-8) issued by Principal General Manager Telecom District Udaipur of Bharat Sanchar Nigam Limited in respect of Optical Fiber Cable Construction work for National Optical Fiber Network Project. 2. It is specified in the e-tender document that the bidder should have an experience of successfully execution of Under Ground (UG) cable and its associated works (Development / Maintenance / Pole Less works) / trenching, laying of OF cable and its other associated works (Development / Maintenance works) for amounting as per given below and clarified / mentioned in Para 7(B) of Section-IV count the total experience in any three Financial year / Calender year / agreement year during last 10 (ten) years (up to date of NIT) in BSNL / MTNL / DOT / TCIL / ITI / any department of central Government or its PSU like railways, defence, military, oil companies. 3. The contention of learned counsel for the petitioner is this that respondent-BSNL has earlier issued e-tender in the year 2017 for Udaipur Zone and other Zones for similar type of works, however, in the said tenders the bidder was required to have experience of completion of OFF/Local Cable Work during any three financial year / calender year / agreement year of last 7 (seven) years in DOT / BSNL / MTNL / PSU / VSNL / Government departments or any licensed telecom service provider for costing at lease 33% of tender amount up to the date of NIT. It is also contended on behalf of the petitioner that in the e-tender issued in January 2018 for Jaipur Zone, Ajmer Zone and Jodhpur Zone for similar type of works, the bidder was required to have experience of lesser works. 4. It is argued on behalf of the petitioner that as the petitioner is not matching the required experience pursuant to e-tender dated 15.01.2018 (Annexure-8) issued for Udaipur Zone, the said condition is bad in the eye of law and liable to be set aside. Heard learned counsel for the petitioner. 5. The main grievance raised by the petitioner in this writ petition is to the effect that the condition regarding experience as specified in e-tender dated 15.01.2018 (Annexure-8) is unreasonable and discriminatory. Heard learned counsel for the petitioner. 5. The main grievance raised by the petitioner in this writ petition is to the effect that the condition regarding experience as specified in e-tender dated 15.01.2018 (Annexure-8) is unreasonable and discriminatory. The petitioner is contending that the said condition regarding experience is incorporated only with the intention to exclude the petitioner and other similar situated persons. However, it has not been contended in the writ petition that the condition regarding experience specified by the respondents in e-tender dated 15.01.2018 (Annexure-8) is beyond the powers of respondents or the same is incorporated due to mala fides. 6. The scope of judicial review in award of contracts has been defined by the Hon'ble Supreme court in various decisions on which the reliance has been placed by the petitioner as well as the respondents. The ultimate conclusion of the decisions of the Hon'ble Supreme Court is this that the High Court can interfere in the contractual matters when the action of the tendering authority is found to be malicious, discriminatory or 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. It has also been held that where the public interest is affected, the court can also interfere in the contractual matters. 7. The Hon'ble Supreme Court in Directorate of Education & Ors. vs. Educomp Datamatics Ltd. & Ors , (2004) 4 SCC 19 has held as under: "9. It is well settled now that the courts can scrutinise the award of the contracts by the Government or its agencies in exercise of its powers of judicial review to prevent arbitrariness or favoritism. However, there are inherent limitations in the exercise of the power of judicial review in such matters. The point as to the extent of judicial review permissible in contractual matters while inviting bids by issuing tenders has been examined in depth by this Court in Tata Cellular vs. Union of India , (1994) 6 SCC 651 . After examining the entire case-law the following principles have been deduced. (SCC pp.687-88, para 94) "94. The principles deducible from the above are: (1) The modern trend points to judicial restraint in administrative action. After examining the entire case-law the following principles have been deduced. (SCC pp.687-88, para 94) "94. The principles deducible from the above are: (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. Normally speaking, the decision to accept the tender or award the contract is reached by process of negotiations through several tiers. More often than not, such decisions are made qualitatively by experts. (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 sphere or quasiadministrative sphere. However, the decision must not only be tested by the application of Wednesbury principle of reasonableness (including its other facts pointed out above) but must 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 and unbudgeted expenditure." [emphasis supplied] 10. In Air India Ltd. v. Cochin International Airport Ltd. , (2000) 2 SCC 617 , this Court observed: (SCC p. 623, para 7) "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 paramount are commercial considerations. 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. 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 the decision-making process and interfere if it is found vitiated by mala fides, unreasonableness and arbitrariness." 11. This principle was again restated by this Court in Monarch Infrastructure (p) Ltd. v. Commr., Ulhasnagar Municipal Corpn. , (2000) 5 SCC 287 . It was held that the terms and conditions in the tender are prescribed by the Government bearing in mind the nature of contract and in such matters the authority calling for the tender is the best judge to prescribe the terms and conditions of the tender. It is not for the courts to say whether the conditions prescribed in the tender under consideration were better than the one prescribed in the earlier tender invitations. 12. It has clearly been held in these decisions that the terms of the invitation to tender are not open to judicial scrutiny the same being in the realm of contract. That the Government must have a free hand in setting the terms of the tender. It must have reasonable play in its joints as a necessary concomitant for an administrative body in an administrative sphere. The courts would interfere with the administrative policy decision only if it is arbitrary, discriminatory, mala fide or actuated by bias. It is entitled to pragmatic adjustments which may be called for by the particular circumstances. The courts cannot strike down the terms of the tender prescribed by the Government because it feels that some other terms in the tender would have been fair, wiser or logical. The courts can interfere only if the policy decision is arbitrary, discriminatory or mala fide." 8. In the case of Michigan Rubber (India) Ltd. Vs. The courts cannot strike down the terms of the tender prescribed by the Government because it feels that some other terms in the tender would have been fair, wiser or logical. The courts can interfere only if the policy decision is arbitrary, discriminatory or mala fide." 8. In the case of Michigan Rubber (India) Ltd. Vs. State of Karnataka & Ors , (2012) 8 SCC 216 Hon'ble Supreme Court while relying on its earlier decisions has held as under: "19) 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. 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." 9. The Hon'ble Supreme Court has further held as under: "31) As observed earlier, the Court would not normally interfere with the policy decision and in matters challenging the award of contract by the State or public authorities. The Hon'ble Supreme Court has further held as under: "31) As observed earlier, the Court would not normally interfere with the policy decision and in matters challenging the award of contract by the State or public authorities. In view of the above, the appellant has failed to establish that the same was contrary to public interest and beyond the pale of discrimination or unreasonable. We are satisfied that to have the best of the equipment for the vehicles, which ply on road carrying passengers, the 2 nd respondent thought it fit that the criteria for applying for tender for procuring tyres should be at a high standard and thought it fit that only those manufacturers who satisfy the eligibility criteria should be permitted to participate in the tender. As noted in various decisions, the Government and their undertakings must have a free hand in setting terms of the tender and only if it is arbitrary, discriminatory, mala fide or actuated by bias, the Courts would interfere. The Courts cannot interfere with the terms of the tender prescribed by the Government because it feels that some other terms in the tender would have been fair, wiser or logical. In the case on hand, we have already noted that taking into account various aspects including the safety of the passengers and public interest, the CMG consisting of experienced persons, revised the tender conditions. We are satisfied that the said Committee had discussed the subject in detail and for specifying these two conditions regarding prequalification criteria and the evaluation criteria. On perusal of all the materials, we are satisfied that the impugned conditions do not, in any way, could be classified as arbitrary, discriminatory or mala fide." 10. In view of the law laid down by the Hon'ble Apex Court in the above referred cases, this Court is of the opinion that simply because the petitioner is not meeting the criterion of experience as mentioned in e-tender dated 15.01.2018 (Annexure-8) , it cannot be said that the condition is unreasonable. The petitioner cannot claim as a matter of right that the condition of tender should always be suitable to it. The conditions of e-tender dated 15.01.2018 (Annexure-8) cannot be interfered with only on the ground that the conditions of earlier tenders are suitable to the petitioner. The petitioner cannot claim as a matter of right that the condition of tender should always be suitable to it. The conditions of e-tender dated 15.01.2018 (Annexure-8) cannot be interfered with only on the ground that the conditions of earlier tenders are suitable to the petitioner. As held by the Hon'ble Supreme Court in various decisions, the scope of judicial review in contractual matters is very limited and the terms and conditions of a tender are not liable to be interfered with unless the same is found to be malicious, discriminatory and against the public interest. 11. In the present case the petitioner has failed to make out a case of discrimination, malafides and also failed to demonstrate that the action of the respondents in introducing the experience condition in e-tender dated 15.01.2018 (Annexure-8) is against the public interest. 12. Hence, no interference is called for in this writ petition and the same is hereby dismissed. Stay petition also stands dismissed.