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2022 DIGILAW 207 (JK)

Pritam Bus Service v. Union of India

2022-05-05

SINDHU SHARMA

body2022
JUDGMENT : 1. National Hydroelectric Power Corporation invited e-tender (NIT) i.e., online electronic bids (e-tender) for Hiring of Tata Buses LPT1512 TC BSIV with horizontal protective grills on the windows or equivalent with drivers and cleaners for 02 years for Salal Power Station, Jyotipuram, District Reasi, J&K. 2. The tender for three buses was issued by the respondent No. 3 vide Bid Nos. GEM/2022/B/1887815 dated 24.01.2022, GEM/2022/B/1904088 dated 29.01.2022 and GEM/2022/B/1927563 dated 05.02.2022. 3. The petitioner, who is a sole proprietor of the firm under the name and style of M/s Pritam Bus Service is an Army contractor and fleet owner possess the requisite experience in the business of transportation and executed various contracts of transportation was unable to participate in the same due to eligibility condition prescribed in these e-NITs though the petitioner was earlier awarded contract for hiring of three Tata Buses for a period of two years by the respondent which he successfully completed. 4. The petitioner is aggrieved of the eligibility condition prescribed in these tenders that only Project Affected Families of Salal Power Station District Reasi (hereinafter referred to as PAF) are eligible to participate which debars the petitioner's firm for participation in the tendering process as arbitrary, not justified and discriminatory. The condition of eligibility which is under challenge in this petition reads as under : “To safeguard the economic opportunities offered voluntarily to PAFs of Salal Power Station, District Reasi are only eligible to participate in the tender”. 5. Mr. Achal Sharma, learned counsel for the petitioner submits that this condition precludes the petitioner from participating in the tendering process even though the petitioner's firm satisfies all the requirements and possess the competence to participate and perform the contract. The petitioner's firm earlier allotted the tender for the same work in the year 2019 which he executed without any complaint. According to the petitioner, the impugned condition of tender is violative of Article 14 of Constitution of India which intends to favour only certain class of persons and eliminate all others from participating in the bidding process for which there is no reasonable justification. The respondents failed to act in a reasonable manner to afford equal opportunity of participation to all and, therefore, the eligibility condition is arbitrary and amenable to judicial review. 6. The respondents failed to act in a reasonable manner to afford equal opportunity of participation to all and, therefore, the eligibility condition is arbitrary and amenable to judicial review. 6. It is further contended that these conditions which have been imposed are an arbitrary exercise of power, as such, the same required to be set aside. The impugned bids whereby the respondents have incorporated eligible criteria only to PAF is also unreasonable because the Salal Power Project was under operation for more than 50 years back and no such condition has been imposed earlier, therefore, incorporating the same on the plea that economic interest of Project Affected Families is to be safeguarded is unwarranted and is required to be set aside. It is further submitted that this condition has been incorporated only to restrict participation and award the contract to few favoured contractors of the choice of the respondents. This condition is being unreasonable, irrational and has no rational or the nexus with the object sought to be achieved, therefore, is violative of Articles 14 and 16 of the Constitution of India and is required to be set aside. 7. Mr. A.P. Singh, learned counsel appearing for the respondents submits that this writ petition is not maintainable as the aforesaid tendering process has been initiated pursuant to the approval of the Board of Directors of the NHPC Ltd. a public sector enterprise company of the Government of India to implement a policy to safeguard the interest and welfare of PAF who have been affected by the construction of the said project. 8. In view of the larger public interest and to uplift their social and economic status, the said policy has been framed and respondents have included the eligibility criteria to PAF. Since the criteria has been set up in the tendering process keeping in view to provide opportunity to improve the social and economic status of the Project Affected Families of Salal Power Station District Reasi, therefore, petitioner has no locus standi to challenge the same. The petitioner, otherwise also, has concealed the fact that his letter of allotment stands extended for one year from 15.03.2021 or till the completion of the tendering process for the replacement of aforesaid vehicles till 31.07.2022. Thus, the petitioner is only interested in prolonging the process. The petitioner, otherwise also, has concealed the fact that his letter of allotment stands extended for one year from 15.03.2021 or till the completion of the tendering process for the replacement of aforesaid vehicles till 31.07.2022. Thus, the petitioner is only interested in prolonging the process. This petition is, thus, not maintainable and the same is required to be dismissed at the very outset. 9. Heard learned counsel for the parties. 10. It is well settled proposition of law that terms of invitation of tender are not open to judicial scrutiny and Courts cannot whether deem the terms of tender as they are in realm of contract unless they are arbitrary, discriminatory, mala fide or actuated by bias. 11. It is well settled that the authority that authors the tender document is the best person to understand and appreciate its requirements, and thus, its interpretation should not be second-guessed by a court while exercising power of judicial review. Generally, the Courts do not interfere with the state's freedom of contract including laying down of the conditions of tender and the notice inviting tender. The exercise of power of judicial review is only to see if there has been any infirmity in the decision-making process. In Tata Cellular v. Union of India, (1994) 6 SCC 631, it has been held that it is always open to the tender issuing authority to suitably prescribe the terms and conditions which best suit the purpose and same cannot be sought to be arbitrary. 12. In 'Afcons Infrastructure Limited v. Nagpur Metro Rail Corporation Limited & Anr.', it was held as under : “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”. 13. In 'Directorate of Education & others v. Educomp Datamatics Ltd. & Ors.,' (2004) 4 SCC 19 , Hon'ble the Apex Court held as under : “12. It has 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 has 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”. 14. The Courts ordinary do not sit in as a court of appeal in contractual maters but merely to review the manner in which the decision is made. The courts are expected to exercise judicial restraint in administrative action, thus, unless the process adopted is malafide or where public interest is affected no interference is warranted. 15. In Jagdish Mandal v. State of Orissa, (2007) 14 SCC 517 , the Hon'ble Apex Court has held as under : “22. Judicial review of administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias and malafides. Its purpose is to check whether choice or decision is made 'lawfully' and not to check whether choice or decision is 'sound'. When the power of judicial review is invoked in matters relating to tenders or award of contracts, certain special features should be borne in mind. A contract is a commercial transaction. Evaluating tenders and awarding contracts are essentially commercial functions. Principles of equity and natural justice stay at a distance. If the decision relating to award of contract is bona fide and is in public interest, courts will not, in exercise of power of judicial review, interfere even if a procedural aberration or error in assessment or prejudice to a tenderer, is made out. The power of judicial review will not be permitted to be invoked to protect private interest at the cost of public interest, or to decide contractual disputes..........” 16. 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..........” 16. In Uflex Ltd. v. The Government of Tamil Nadu, Hon'ble Apex Court has held as under : “2. The judicial review of such contractual matters has its own limitations. It is in this context of judicial review of administrative actions that this Court has opined that it is intended to prevent arbitrariness, irrationality, unreasonableness, bias and mala fide. The purpose is to check whether the choice of decision is made lawfully and not to check whether the choice of decision is sound. In evaluating tenders and awarding contracts, the parties are to be governed by principles of commercial prudence. To that extent, principles of equity and natural justice have to stay at a distance”. 17. The respondents-Board of Directors, NHPC, vide its Circular No. CCW/2019/99 dated 28.06.2019 approved the policy for reservation of perks to be awarded on Local Competitive Bidding basis to PAFs and Locals residing near to the Project/Power Station which shall help them in uplifting their social and economic status. During the management review and it was observed that since most of the works and contract awarded on nomination basis are repetitive in nature and relates to hiring of vehicles, housekeeping and maintenance of guest house and such works are generally be awarded to facilitate Project Affected Families (PAFs) and locals residing near the projects and, therefore, to uplift their social and economic status, the policy was brought into force to reserve certain type of works for PAFs and vendors having working experience and operating near to the project/power station. The PAFs were defined as per in relation to land acquired for NHPC has held : (i) A family whose land or other immovable property has been acquired; (ii) A family which does not own any land but a member or members of such family may be agricultural labourers, tenants including any form of tenancy or holding of usufruct right, share-croppers or artisans or who may be working in the affected are for three years prior to the acquisition of the land, whose primary source of livelihood stand affected by the acquisition of land; (iii) The Scheduled Tribes and other traditional forest dwellers who have lost any of their forest rights recognized under the Scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Forest Right) Act, 2006 due to acquisition of land; (iv) Family whose primary source of livelihood for three years prior to the acquisition of the land is dependent on forest or water bodies and includes gatherers of forest produce, hunters, fisher folk and boatmen and such livelihood is affected due to acquisition of land; (v) A member of the family who has been assigned land by the State government or the Central Government under any of its schemes and such land is under acquisition; (vi) A family residing on any land in the urban areas for preceding three years or more prior to the acquisition of the land or whose primary source of livelihood for three years prior to the acquisition of the land is affected by the acquisition of such land”. 18. Thus, in terms of aforesaid policy, the NHPC allotted tender and included the eligibility criteria to accommodate the PAFs and locals of District Reasi in the works of Salal Power Station for which the land was acquired. The contention of the petitioner is that earlier he had successfully executed the work, can be no ground to quash the eligibility condition. In view of the fact that this policy was adopted by way of management review by the respondents in the year 2019. The e-tenders have been published in transparent manner in the open competitive bidding through a Government Portal of GeM (Government e-Market Place) for all the PAFs of Salal Power Station and strictly as per the policy, therefore, the allegations that same did not provide an equal opportunity to others or is to benefit someone is also without any basis. The e-tenders have been published in transparent manner in the open competitive bidding through a Government Portal of GeM (Government e-Market Place) for all the PAFs of Salal Power Station and strictly as per the policy, therefore, the allegations that same did not provide an equal opportunity to others or is to benefit someone is also without any basis. The petitioner has merely raised bald allegations of mala fide intention which are without any basis. 19. It is well settled that the tender inviting authority is entitled to fix its own terms of the tender and the same are not open to judicial scrutiny particularly when the same has been incorporated to for social and economic upliftment of the locals who had given up their land for setting up of the project which provides the electricity to the nation. The policy of the NHPC vide which the eligibility condition of allowing PAFs of Salal Power Station District Reasi only to participate in the tendering process is neither arbitrary or discriminatory but is well within their right to frame policy for upliftment of the families who have been displaced as a result of construction and running of the power station in the area. 20. In M/s N.G Projects Limited v. M/s Vinod Kumar Jain & Ors., it has been held that : “23. In view of the above judgments of this Court, the Writ Court should refrain itself from imposing its decision over the decision of the employer as to whether or not to accept the bid of a tenderer. The Court does not have the expertise to examine the terms and conditions of the present day economic activities of the State and this limitation should be kept in view. Courts should been more reluctant in interfering with contracts involving technical issues as there is a requirement of the necessary expertise to adjudicate upon such issues. The approach of the Court should be not to find fault with magnifying glass in its hands, rather the Court should examine as to whether the decision-making process is after complying with the procedure contemplated by the tender conditions....................” 21. Hence the condition in the eligibility criteria restricting the participation in the tender to the Project Affected Families cannot be construed to be classification without having any nexus with the object sought to be achieved, therefore, the contention of the petitioner is without any merit. Hence the condition in the eligibility criteria restricting the participation in the tender to the Project Affected Families cannot be construed to be classification without having any nexus with the object sought to be achieved, therefore, the contention of the petitioner is without any merit. The petitioner, in fact, has not disclosed all the facts and his interest is only in delaying the tendering process in order to continue with the contract already allotted to him. This apart only bald allegations of mala fide have been made without substantiating the same. 22. In view of the aforesaid discussion, there is no merit in this petition and the same is, accordingly, dismissed along with connected application(s).