JUDGMENT : 1. The case setup by the petitioner in the instant petition filed under Article 226 of the Constitution is that the respondent Jammu and Kashmir Forest Development Corporation (for short the Corporation) issued a short term tender notice vide e-NIT No. 06 of 2021-22/South Dated 18.09.2021 (for short the e-NIT) inviting e-tenders from Class “A” contractors registered with the Corporation for execution of various timer logging operations viz Extraction, Off Road Transportation and Road Transportation of Marked Trees coming in various projects/ road alignments in advertised compartments falling in Extraction Division Anantnag/PP East Extraction Division Pulwama of South Circle as per the details provided in the tender notice. Besides above other terms and conditions as also the formalities required to be fulfilled by a bidder were also provided in the said e-tender. 2. It is stated in the petition that as per the annexure (1) of the e-NIT for compartments D-22 and D-24, the volume to be exploited was shown as “Standing Volume 107700” and Expected Conv. Volume was 75400 for compartment D-22 and similarly for compartment D-24 “Standing Volume 112000 and expected Conv. Volume was 77900” and brief activities envisaged for execution of contract/project provided was extraction including conversion of trees into logs, De-Branching, De-barking, Carving, Passing Off Road Transportation, Road Transportation of Stocks etc and destination provided was SD Shalteng and norms of rates per square feet were provided as 89.39 and 89.40 for compartments D-22 and D-24 respectively. 3. It is also stated that the last date provided in the e-NIT was extended from 21.10.2021 to 30.12.2021 in terms of corrigendum issued by the Corporation on 21.10.2021 and the petitioner herein being eligible in terms of e-NIT applied for execution of work in compartments D-22 and D-24, submitted bids and also earnest money thereof. 4. It is being next stated that as many as 5 bidders had submitted their bids whereafter the petitioner was declared as L1 for compartments D-22 and D-24, whereupon the petitioner engaged laborers and paid them in advance expecting the work in question would be allotted to him which surprisingly was not allotted to the petitioner and feeling aggrieved of the non-allotment of the contract in question despite having been declared as L1, the petitioner has approached this Court through the medium of instant petition. 5.
5. This Court upon coming of the petition for consideration on 29.11.2022, while issuing notice to the respondents herein directed them to consider the claim of the petitioner qua the finalization of the tender process initiated by them pursuant to e-NIT in question in tune with the Scheme and Rules governing the field. 6. The respondents Corporation upon service of the notice issued by this Court caused its appearance through its counsel and filed objections to the petition and along with the objections placed on record a copy of order dated 25.01.2022 whereunder the claim of the petitioner herein had been considered and rejected on the same grounds as have been urged by the respondent Corporation in the objection filed to the petition. 7. Per contra, in the reply filed to the petition by the respondent Corporation it is being stated that in the Corporation there is a fair and transparent procedure in place in respect of the tenders issued by it for all the works including the works in question and that the Tender Opening Committee is entrusted with the said job while it is being admitted in the reply that petitioner participated in the tendering process under the e-NIT in question for the works in question, in the compartments D-22 and D-24. 8. It is being also stated that the Tender Opening Committee after evaluating the bids in comparison to other compartments advertised in the same e-NIT observed that bidders of bids indicating healthy competition has not taken place and, as such, a poor competition has direct effect on the financial health of the Corporation and in the process would cause loss to the Government exchequer. 9. It has further stated in the reply that lowest bid offered by the petitioner in respect of compartments D-22 and D-24 was 8.27% and 7.16% below the norm rates respectively, which in comparison to earlier NITs was much higher. An illustration has also been given and the bids offered in the year 2021 in which the impugned bid was 40.64% and 43.24% below the norm rates for compartments D-22 and D-24 respectively.
An illustration has also been given and the bids offered in the year 2021 in which the impugned bid was 40.64% and 43.24% below the norm rates for compartments D-22 and D-24 respectively. It has also been stated in the objections that certain bids with respect to the two compartments in question were above the norm rate, which pattern of bids was found to be unprecedented and such pattern having not been observed earlier and that as per the clause 13.1 of the general instructions provided in the e-NIT, the Corporation reserved with itself a right to accept or reject any of the tenders before or after their opening without any assigning reasons or any action and that under clause 13.1 which provided that rates offered by the bidders even if lowest, shall not be binding on the Corporation and it shall be subject to rejection in case such rights are not found requisite. Heard counsel for the parties and perused the record. 10. Before adverting to the issue/s involved in the petition it would be appropriate in brief to refer hereunder the settled position of law laid down by the Hon’ble Supreme Court governing the field in order to ascertain as to whether the decision of the respondents Corporation warrants interference or not. The Apex Court in the celebrated case in case titled as “Tata Cellular Vs. Union of India reported in 1994 (6) SCC 651 ” has laid down the following principles in para 94 to be taken into consideration by the Court while dealing with the tender matters : 94. The principles deducible from the above are:- (1) The modem 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.
(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 quasi-administrative 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. In case titled as “Michigan Rubber (India) Limited Vs. State of Karnataka and Ors. reported in 2012 (8) SCC 216 ” wherein at para 23 Apex Court observed 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. 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 the 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 the 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 a fundamental right to carry on business with the Government. In case titled as “Uflex Ltd Vs. State of T.N. reported in 2022 (1) SCC 165 ” wherein at para 42 following has been laid by the Apex Court: - 42. We must begin by noticing that we are examining the case, as already stated above, on the parameters discussed at the inception. In commercial tender matters there is obviously an aspect of commercial competitiveness. For every succeeding party who gets a tender there may be a couple or more parties who are not awarded the tender as there can be only one L-1. The question is should the judicial process be resorted to for downplaying the freedom which a tendering party has, merely because it is a State or a public authority, making the said process even more cumbersome. We have already noted that element of transparency is always required in such tenders because of the nature of economic activity carried on by the State, but the contours under which they are to be examined are restricted as set out in Tata Cellular and other cases. The objective is not to make the Court an appellate authority for scrutinizing as to whom the tender should be awarded. Economics must be permitted to play its role for which the tendering authority knows best as to what is suited in terms of technology and price for them. In case titled as “N.G. Projects Limited Vs. Vinod Kumar Jain and Ors.
Economics must be permitted to play its role for which the tendering authority knows best as to what is suited in terms of technology and price for them. In case titled as “N.G. Projects Limited Vs. Vinod Kumar Jain and Ors. reported in 2022 (6) SCC 127 ” wherein at para 23 following has been held by the Apex Court:- 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 be even 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. If the Court finds that there is total arbitrariness or that the tender has been granted in a malafide manner, still the Court should refrain from interfering in the grant of tender but instead relegate the parties to seek damages for the wrongful exclusion rather than to injunct the execution of the contract. The injunction or interference in the tender leads to additional costs on the State and is also against public interest. Therefore, the State and its citizens suffer twice, firstly by paying escalation costs and secondly, by being deprived of the infrastructure for which the present-day Governments are expected to work. Further in case titled as “Tata Motors Ltd. vs. The Brihan Mumbai Electric S.& T. Undertaking reported in AIR 2023 SC 2717 ” wherein at para 48 following has been held by the Apex Court : This Court being the guardian of fundamental rights is duty-bound to interfere when there is arbitrariness, irrationality, malafides and bias. However, this Court has cautioned time and again that courts should exercise a lot of restraint while exercising their powers of judicial review in contractual or commercial matters.
However, this Court has cautioned time and again that courts should exercise a lot of restraint while exercising their powers of judicial review in contractual or commercial matters. This Court is normally loathe to interfere in contractual matters unless a clear-cut case of arbitrariness or malafides or bias or irrationality is made out. One must remember that today many public sector undertakings compete with the private industry. The contracts entered into between private parties are not subject to scrutiny under writ jurisdiction. No doubt, the bodies which are State within the meaning of Article 12 of the Constitution are bound to act fairly and are amenable to the writ jurisdiction of superior courts but this discretionary power must be exercised with a great deal of restraint and caution. The courts must realise their limitations and the havoc which needless interference in commercial matters can cause. In contracts involving technical issues the courts should be even more reluctant because most of us in Judges' robes do not have the necessary expertise to adjudicate upon technical issues beyond our domain. The courts should not use a magnifying glass while scanning the tenders and make every small mistake appear like a big blunder. In fact, the courts must give “fair play in the joints” to the government and public sector undertakings in matters of contract. Courts must also not interfere where such interference will cause unnecessary loss to the public exchequer. From the judgments of the Apex Court supra it is thus, well settled that while exercising extraordinary writ jurisdiction under Article 226 of the Constitution, this Court should be slow in interfering in the matters relating to the tender. A narrow scope for interference however, has been carved out to prevent arbitrariness, irrationality, unreasonableness and favourtism in the administrative actions of the State. 11.
A narrow scope for interference however, has been carved out to prevent arbitrariness, irrationality, unreasonableness and favourtism in the administrative actions of the State. 11. In the light of aforesaid position and principles of law and reverting back to the case in hand it is an admitted fact that respondent Corporation did not allot the work in question for compartments D-22 and D-24 in terms of e-NIT dated 21.09.2021 to the petitioner despite being the lowest bidder and instead rejected the claim of the petitioner after considering the same in terms of order passed by this Court vide impugned order dated 25.01.2022 on the grounds spelt out in the impugned order as well as the objections filed to the petition as noticed in the preceding paras. As has been held by the Apex Court in Uflex case supra and rightly so, economics must be permitted to play its role for which the tendering authority knows best as to what is suited in terms of the technology and price for them. Whether acceptance of particular bid even being lowest is suitable for the tendering authority or not is not within the domain of such authority and this Court in exercise of powers under Article 226 of the Constitution cannot decide the same and direct the authority to accept such bid, reason being this Court lacks such expertise, more so in absence of plea of malafides against the manner in which the respondent Corporation has proceeded in the matter as also the rejection of claim of the petitioner, this Court will not interfere in the same. 12. For what has been observed, considered and analyzed hereinabove the petition is found to be devoid of any merit and resultantly fails. Accordingly petition is, dismissed.