J.B. Pardiwala, J.
1. By this writ-application under Article 226 of the Constitution of India, the writ-applicant has prayed for the following reliefs :
"(a) That this Hon'ble Court may be pleased to issue a writ of mandamus and/or any other appropriate writ, order or direction quashing and setting aside the decision of the Respondent whereby the Petitioner stands disqualified for the subject tender;
(b) That this Hon'ble Court may be pleased to issue a writ of mandamus and/or any other appropriate writ, order or direction directing the Respondent to consider the Petitioner's Technical Bid for the subject tender;
(c) That pending admission, hearing and final disposal of the present petition, this Hon'ble Court may be pleased to direct the Respondents to refrain from opening Price Bid/Completing RA Process/issuing a Purchase Order in respect of the subject tender;
(d) That this Hon'ble Court may be pleased to issue ad interim ex-parte relief in terms of Para (c) hereinabove;
(e) That this Hon'ble Court may be pleased to award cost of the present petition to the Petitioners;
(f) Pass such other order(s) as this Hon'ble Court deems fit in the facts and circumstances"
2. The facts giving rise to this writ-application may be summarised as under:
The writ-applicant is a company engaged in the business of recycled eco-responsible and innovative papers. The respondent herein is a society registered under the Societies Registration Act, 1860 (for short, 'the Act 1860'). This society is an arm of the Education Department, State of Gujarat. The society was established to help and accelerate students in progress of primary, secondary and higher secondary education as well as to publish various textbooks in accordance with the syllabus- curriculum that may be approved by the Government of Gujarat. The respondent society through Government E-Market (GEM) portal floated a Tender Bid No.GEM/2021/B/1401698 dated 2 nd August 2021 for procurement of 2,50,00,000 MapLitho Papers as per IS:1848 (Part-I) specification. The last date for submission of the bid was 17.8.2021 at 3:30 p.m.
3. The bid document stipulated the following documents to be produced by the bidder :
(i) Experience Criteria;
(ii) Past Performance;
(iii) Bidder Turnover;
(iv) Certificate (requested in ATC);
(v) OEM Authorization Certification;
(vi) OEM Annual Turnover.
4. The bid document further clarified that two days' time would be allowed for technical clarifications during the technical evaluation.
5. It is not in dispute that the writ-applicant submitted its bid on 17.8.2021 at 2:37 p.m., i.e. before the expiry of the time limit prescribed. It is also not in dispute that the writ-applicant uploaded all the documents as required and referred to above.
6. The dispute cropped up as regards the alleged failure to submit the certificate (requested in the additional terms and conditions (ATC). In respect of the certificate as demanded in the ATC, i.e. additional terms and conditions, the writ-applicant produced three work orders in accordance with the Clause-12 of the tender document. The writ-applicant, along with its bid, uploaded three work orders issued by the West Bengal Text Book Corporation Limited, HT Media Limited and Pritam Enterprise respectively.
7. The writ-applicant also produced a certificate issued by a Chartered Accountant certifying that a specific amount of work had been undertaken by the writ-applicant. Although the writ- applicant made all possible efforts to procure the satisfactory performance certificates prior to 17.8.2021, yet those could not be procured for the reasons beyond the control of the writ- applicant.
8. On 19th August 2021 when the writ-applicant looked into its GEM portal, the bid offered by him was shown as 'disqualified' against the subject tender. On opening the hyperlink provided beneath the said word, the following in the comment section was noticed to have been stated :
"Not qualified 1. Not meeting project execution criteria as per Sr.No.12 of BID as not submitted performance certificate for 2 orders and not submitted purchase order for performance certificate given by Pritam Enterprise."
9. On 23rd August 2021 at 11:14 a.m., the respondent-society rejected the three documents which were produced on 19 th August 2021, by placing reliance on Clause 16 of the bid document.
10. It appears that thereafter the respondent, on 23 rd August 2021, proceeded to open the price bids and initiated the reverse auction process on the very same day at 11:22 a.m., i.e. within 8 minutes of rejecting the offer of the writ-applicant.
11. It is the case of the writ-applicant that ordinarily the procedure being adopted is that post opening of the technical bid the price bid of the technically qualified bidders is opened and the reverse auction process would commence. Such process would start after two days of the opening of the price bid and may conclude within two days thereafter. However, according to the writ-applicant as alleged, undue haste was shown in the present case as the society wanted to oust the writ-applicant at any cost.
12. In such circumstances referred to above, the writ-applicant came rushing to this High Court with the present writ- application.
13. On 24th August 2021, this Court passed the following order:
"The draft amendment is allowed. The necessary incorporation shall be carried out at the earliest.
We have heard Mr. M.R. Bhatt, the learned senior counsel assisted by Ms. Mauna Bhatt, the learned advocate appearing for the writ applicant.
Let notice be issued to the respondent, returnable on 2 nd September, 2021.
Having heard the learned senior counsel and having gone through the materials on record, we are of the view that the writ applicant has been able to make out a strong prima facie case to have an ad-interim order in his favour in terms of Para-16(c). We, accordingly, grant such relief till 2nd September, 2021.
Direct service is permitted today. Service through Email is also permitted."
SUBMISSIONS ON BEHALF OF THE WRIT-APPLICANT :
14. Mr.M.R.Bhatt, the learned senior counsel assisted by Mr.Munjaal M.Bhatt, the learned advocate appearing for the writ-applicant, vehemently submitted that the action on the part of the society smacks of lack of bonafide. The bid offered by the writ-applicant could be said to have been rejected on a flimsy ground or rather contrary to the terms and conditions of the tender document. Mr.Bhatt would submit that the society seeks to invoke Clause 16 of the bid documents for the purpose of disqualifying his client, but in the process, failed to take note of the fact that Clause 16 specifically talks about rejection if the writ-applicant would have failed to upload any of the certificates/documents sought in the bid, ATC and Corrigendum.
15. Mr.Bhatt submitted while pointing towards a specific reference in the bid document that two days' time shall be granted for technical clarification.
16. Mr.Bhatt would submit that if the society is asked by this Court to consider the bid offered by the writ-applicant, then the society would be saving approximately Rs.15 crore of public exchequer as the price bid offered by L1 is substantially higher compared to the price bid offered by the writ-applicant.
17. In such circumstances referred to above, Mr.Bhatt prays that there being merit in his writ-application, the same be allowed and the reliefs prayed for in the present writ-application may be granted.
SUBMISSIONS ON BEHALF OF THE RESPONDENT -
18. Mr.A.D.Oza, the learned counsel appearing for the respondent, on the other hand, has vehemently opposed this writ-application by raising a preliminary objection as regards the maintainability of the present writ-application. According to Mr.Oza, his client is a society registered under the Act 1860. The society cannot be said to be 'State' or any instrumentality of State within the meaning of Article 12 of the Constitution of India. The society would not even fall within the ambit of 'any other authority'. The society was formed and registered with a particular object. The main function of the society is to print textbooks of different subjects on the basis of the curriculum that may be fixed by the State Government. Mr.Oza would submit that the society cannot be said to be discharging any public function nor does it perform any public duty. The society does not receive any grant or financial assistance from the State Government.
19. In such circumstances, according to Mr.Oza, the present writ-application deserves to be rejected only on the ground of its maintainability.
20. Mr.Oza would submit that without prejudice to his preliminary objection as regards the maintainability of the present writ-application, even otherwise on merits, the writ- applicant has no case.
21. The first point urged by Mr.Oza is that the writ-applicant is not fulfilling the eligibility criteria as prescribed in Clause 12 of the tender document. According to Mr.Oza, the bidder should have executed project for supply and installation/commissioning of same or similar products during the preceding three financial years (i.e. current year and three preceding financial years) as on the opening of the bid. According to Mr.Oza, the position as regards the purchase/execution as pointed out in the affidavit- in-reply is as under :
"Purchase Order dated 12.02.2018 bearing PO No.TBGP017-0329 issued by West Bengal Text Book Corporation Limited of Rs.11,33,92,000/-.
It is submitted that the said purchase order was not issued during the preceding three years (the order was issued for year 2017-18) and the amount of said order was not 35% or 20% or 15% of total estimated bid value as per the criteria prescribed in the condition no.12 of Bid Document. Further, admittedly, the satisfactory performance certificate towards such purchase order was also not submitted. Therefore, the said document was not considered as valid document.
Purchase Order dated 23.02.2018 bearing PO No.TBGP017- 0336 issued by West Bengal Text Book Corporation Limited of Rs.17,00,89,290.20/-.
It is submitted that the said purchase order was not issued during the preceding three years (the order was issued for year 2017-2018) and the amount of said order was not 35% or 20% or 15% of total estimated bid value as per the criteria prescribed in the condition no.12 of Bid Document. Further, admittedly, the satisfactory performance certificate towards such purchase order was also not submitted. Therefore, the said document was not considered as valid document.
Purchase Order dated 21.07.2018 bearing PO No.TBPO18- 0128 issued by West Bengal Text Book Corporation Limited of Rs.8,52,58,500/-.
It is submitted that the amount of said order was not 35% or 20% or 15% of total estimated bid value as per the criteria prescribed in the condition no.12 of Bid Document and admittedly, the satisfactory performance certificate towards such purchase order was also not submitted. Therefore, the said document was not considered as valid document."
22. Thus, according to Mr.Oza, the orders were issued for the year 2017-18 and, therefore, it could not be said that the supply and installation/commissioning was during the preceding three financial years. In short, according to Mr.Oza, it has to be 2018- 19, 2019-20 and 2020-2021. Mr.Oza thereafter pointed out that although the writ-applicant seeks to rely upon the purchase orders and other documents relating to the State Government organizations/ public listed companies, yet one of the companies, namely, Pritam Enterprise, is a private company and, therefore, having regard to the experience criteria as prescribed in the tender document, the writ-applicant was rightly disqualified.
23. Thus, according to Mr.Oza, the disqualification of the writ- applicant deserves to be uphold on two counts :
(i) The supply not undertaken during the three financial years;
(ii) One of the companies being a private company.
24. In such circumstances referred to above, Mr.Oza prays that there being no merit in the present writ-application, the same may be rejected.
REJOINDER OF THE WRIT-APPLICANT :
25. Mr.Bhatt, the learned senior counsel, in rejoinder to the submissions canvassed on behalf of the respondent, submitted that the preliminary objection as regards the maintainability of the present writ-application as raised on behalf of the respondent society is without any substance or merit. In this regard, Mr.Bhatt invited the attention of this Court to para-5 of the affidavit-in-rejoinder filed by the writ-applicant. The same reads thus :
"I respectfully state and submit that the contention of the Respondent under Paragraph 5 that it is not a 'State' under Article 12 of the Constitution of India is far from truth. On the contrary, its Administrative Structure comprises of the Hon'ble Education Minister as President and the Board advertises itself as an arm of the Education Department, State of Gujarat. Moreover, the Respondent is also covered under the ambit of Right to Information Act, 2005, thereby making it a public authority. As per the information available on its official website, the General Board and Director Board consists of 11 Government members. Further, all the members of the Education Committee are Directors of Government controlled boards. The Respondent has conveniently brushed aside the deep and pervasive control exercised by the State in their day-to-day affairs, which establishes that it is squarely covered under the definition of 'State'."
26. So far as the contention as regards the Pritam Enterprise being a private company, Mr.Bhatt submitted that the only requirement is the satisfactory performance certificates issued by the respective buyer organizations. According to Mr.Bhatt, the second contention as regards Pritam Enterprise is altogether a new case made out by the respondent. The respondent, at no point of time, said that the work order of the Pritam Enterprise is liable to be rejected being a private party. According to Mr.Bhatt, it is incorrect to read Clause-2 into Clause-12 as both the clauses are two distinct tender conditions. Clause-2 falls under 'Bid Document' and Clause-12 falls under the 'Buyer Added Bid Specific Additional Terms and Conditions'. He would argue that Clause-2 talks about 'experience criteria', wherein his client is obliged to produce copies of the relevant contracts of having supplied some quantity of product to any Central/State Government organizations/PSU/Public Listed companies. According to Mr.Bhatt, his client fulfills this condition and has effected supplies to the State Government organizations, namely, West Bengal Text Books Corporation Limited, for the last three years and a certificate in that regard issued by a Chartered Accountant is also on record.
27. In such circumstances referred to above, Mr.Bhatt would submit that none of the contentions raised on behalf of the respondent society merit any consideration.
28. Having heard the learned counsel appearing for the parties and having gone through the materials on record, the only question that falls for our consideration is, whether the respondent society was justified in disqualifying the writ- applicant from the tender process.
29. We must first answer the preliminary contention as raised by Mr.Oza regarding the maintainability of the present writ- application. According to Mr.Oza, his client is not a 'State' within Article 12 of the Constitution of India. On the other hand, Mr.Bhatt has pointed out the legal status of the respondent society in para-5 of the affidavit-in-rejoinder. It appears that the respondent Board is a part of the Education Department of the State of Gujarat. The President of the Board is none other but the Education Minister of the State. The General Board and the Board of Directors consists of eleven Government Officials. There appears to be deep and pervasive control of the State Government over the affairs of the Board.
30. Once the society is registered under the Act 1860 with the Registrar, it enjoins the status of a legal entity apart from the members constituting the same. The registration of the society confers on it certain advantages. A society not registered under the Act would at the most have the characteristic of an association. However, once the society is registered under the Act, it enjoins the status of a legal entity.
31. The first question that surfaces for consideration is, whether the respondent-society comes within the purview of 'State' within the meaning of the term used in Article 12 of the Constitution quoted hereinbelow :
"12. Definition.--In this part, unless the context otherwise required, "the State" includes the government and Parliament of India and the Government and the Legislature of each of the states and all local or other authorities within the territory of India or under the control of the government of India."
32. The inclusive language in which the word 'State' has been defined in Article 12 would evince that the definition is not exhaustive. The expression 'other authorities' also leads to the same conclusion. The expression 'other authorities', in our view, embraces within its sweep and ambit, every public authority exercising statutory powers; every authority created by or under a statute; and even a non-statutory authority exercising public functions. The main principle evolved is that of 'instrumentality or agency' of Government-a concept wider than a 'department of Government'.
33. In Ajay Hasia v. Khalid Mujib, AIR 1981 SC 481, wherein Regional Engineering College-a registered society was held to be 'State'. The following tests were formulated for determining, whether an entity is an 'instrumentality or agency' of State :
"(1) One thing is clear that if the entire share capital of the corporation is held by Government it would go a long way towards indicating that the corporation is an instrumentality or agency of Government.
(2) Where the financial assistance of the State is so much as to meet almost entire expenditure of the corporation, it would afford some indication of the corporation being impregnated with governmental character.
(3) It may also be a relevant factor, whether the corporation enjoys monopoly status which is the State conferred or State protected.
(4) Existence of deep and pervasive State control may afford an indication that the Corporation is a State agency or instrumentality.
(5) If the functions of the corporation of public importance and closely related to governmental functions, it would be a relevant factor in classifying the corporation as an instrumentality or agency of Government."
34. In order to qualify itself to become an 'instrumentality or agency' of a State, it is not essential for a juristic entity or body to satisfy all the tests aforestated and in a given case, one or a combination of more than one of them may suffice. Let us examine if the respondents-society can be characterised as an instrumentality or agency of a State judged on the touchstone of any of the tests aforestated. One of the tests enunciated in Ajay Hasia (supra) is 'existence of deep and pervasive State control'.
35. What has been highlighted in para-5 of the affidavit-in- rejoinder filed on behalf of the writ-applicant, which is at page- 65 of the paper book, and not disputed by the respondent and if the test of deep and pervasive State control is applied to the respondent society/board, it would qualify itself to be characterised as an instrumentality or agency of the State, regard being had to the public nature of its function. However, even if the society's registration under the provisions of the Act 1860 and the Rules framed thereunder are not held to be State within the meaning of Article 12 of the Constitution of India, regard being had to the public nature of their functions, we have no hesitation in holding that the society's registration under the provisions of the Act 1860 do satisfy the requirement of being 'authority' within the meaning of Article 226 of the Constitution of India. It cannot be gainsaid that the term 'authority' has been used in Article 226 of the Constitution of India in a liberal sense unlike the term used in Article 12 of the Constitution of India.
36. In our opinion, the society's registration under the Act 1860 is as much bound as 'State' to follow the fundamental principles of reasonableness, fairness and transparency which, under the scheme of our Constitution are fundamental to governance of any democratic institution. Accordingly, we are of the considered view that the respondent society is amenable to the writ jurisdiction of this Court under Article 226 of the Constitution of India.
37. The view we are taking finds support from the case law referred to in Dwarka Nath v. I.T.O., AIR 1966 SC 81, the Supreme Court held as under :
"This article is couched in comprehensive phraseology and it ex facie confers a wide power on the High Courts to reach injustice wherever it is found. The Constitution designedly used a wide language in describing the nature of the power, the purpose for which and the person or authority against whom it can be exercised. It can issue writs in the nature of prerogative writs as understood in England ; but the scope of those writs also is widened by the use of the expression nature, for the said expression does not equate the writs that can be issued in India with those in England, but only draws an analogy from them. That apart. High Courts can also issue directions orders or writs other than the prerogative writs. It enables the High Courts to mould the reliefs to meet the peculiar and complicated requirements of this country. Any attempt to equate the scope of the power of the High Courts under Article 226 of the Constitution with that of the English courts to issue prerogative writs is to introduce the unnecessary procedural restrictions grown over the years in a comparatively small country like England with a unitary form of Government into a vast country like India functioning under a federal structure. Such a construction defeats the purpose of the Article itself."
38. In Shri Anadi Mukta S.M.V.S.S.J.M.S. Trust v. V.R.Rudani, (1989) 2 SCC 691, a two-Judge bench of the Supreme Court was considering the question of :
"Issue of a writ of mandamus or writ in the nature of mandamus or any other appropriate writ or direction or order directing the appellant-Trust and its trustees to pay to the respondents their due salary and allowances etc. In accordance with the Rules framed by the University and to pay them compensation under a certain Ordinance of the University."
39. The essence of the attack on the maintainability of the writ petition under Article 226 by the appellant therein was that it being a Trust registered under the Bombay Public Trusts Act, 1950, was not amenable to the writ jurisdiction of the High Court. In other words, the contention was that the Trust being a private institution against which no writ of mandamus could be issued. In support of the contention, the appellant therein relied upon two decisions : Executive Committee of Vaish Degree College v. Lakshmi Narain; and Dipak Kumar Biswas v. Director of public Instruction. The court held as under :
"20. The term authority used in Article 226. In the context, must receive a liberal meaning unlike the term in Article 12. Article 12 is relevant only for the purpose of enforcement of fundamental rights under Article 32. Article 226 confers power on the High Courts to issue writs for enforcement of the fundamental rights as well as non-fundamental rights. The words any person or authority used in Article 226 are, therefore, not to be confined only to statutory authorities and instrumentalities of the State. They may cover any other person or body performing public duty. The form of the body concerned is not very much relevant. What is relevant is the nature of the duty imposed on the body. The duty must be judged in the light of positive obligation owned by the person or authority to the affected party. No matter by what means the duty is imposed if a positive obligation exists mandamus cannot be denied."
And finally it said as under :
"22. Here again we may point out that mandamus cannot be denied on the ground that the duty to be enforced is not imposed by the statute. Commenting on the development of this law. Professor De Smith states : To be enforceable by mandamus a public duty does not necessarily have to be one imposed by statute. It may be sufficient for the duty to have been imposed by charter, common law, custom or even contract. " We share this view. The judicial control over the fast-expanding maze of bodies affecting the rights of the people should not be put into watertight compartment. It should remain flexible to meet the requirements of variable circumstances. Mandamus is a very wide remedy, which must be easily available "to reach injustice wherever it is found". Technicalities should not come in the way of granting that relief under Article 226. We, therefore, reject the contention urged for the appellants on the maintainability of the writ petition."
40. The Supreme Court in Praga Tolls Corporation v. C.A.Imanual, (1969) 1 SCC 685 held as under :
"It is, however, not necessary that the person or the authority on whom the statutory duty is imposed need be a public official or an official body. A mandamus can issue, for instance, to an official of a society to compel him to carry out the terms of the statutes under or by which the society is constituted or governed and also to companies or corporations to carry out duties placed on them by the statutes authorising their undertakings. A mandamus would also lie against a company constituted by a statute for the purpose of fulfilling public responsibilities." (Cf. Halsburys Laws of England, 3rd Edn. , Vol. II, p. 52 and onwards).
41. In Air India Statutory Corporation v. United Labour Union, (1997) 9 SCC 377, the Supreme Court speaking through a Bench of three Judges said : (SCC pp. 435-36, para 60) :
"60. The public law remedy given by Article 226 of the Constitution is to issue not only the prerogative writs provided therein but also any order or direction to enforce any of the fundamental rights and for any other purpose. The distinction between public law and private law remedy by judicial adjudication has gradually marginalised and became obliterated."
42. In L.I.C. v. Escorts Ltd. (SCC at p. 344), the Supreme Court in para 102 had pointed out that the difficulty may lie in demarcating the frontiers between the public law domain and the private law field. The question must be decided in each case with reference to the particular action, the activity in which the State or the Instrumentality of the State is engaged when performing the action, the public law or private law character of the question and the host of other relevant circumstances. Therein, the question was whether the management of L.I.C. should record reasons for accepting the purchase of the shares ? It was in that fact-situation that the Supreme Court held that there was no need to state reasons when the management of the shareholders by resolution reached the decision. The Court equally pointed out in other cases that when the States power as economic power and economic entrepreneur and allocator of economic benefits is subject to the limitations of fundamental rights, a private corporation under the functional control of the State engaged in an activity hazardous to the health and safety of the community, is imbued with public interest which the State ultimately proposes to regulate exclusively on its industrial policy. It would also be subject to the same limitations as held in M.C.Mehta v. Union of India.
43. In Ram Saran v. State of U.P. and others, (1998) 3 UPLBEC 1860, the High Court of Allahabad had an occasion to go into the tenability of the question as to maintainability of writ as against the co-operative society registered under the provisions of the U.P. Co-operative Societies Act, 1965. The court held therein, inter-alia, as under :
"A co-operative society registered under the Co-operative Societies Act, 1965 and the Rules made thereunder may be a private body but it certainly caters to the needs of public and the employees being the arm of the society cannot be dealt with by the society in an arbitrary manner. Absence of arbitrariness in action by bodies performing public function is a facet of article 14 of the Constitution. Violation of Article 14 by public bodies will give rise to a cause of action under Article 226 of the Constitution."
44. Article 226 of the Constitution is phrased in a language of very wide amplitude, which does not admit of any limitation or restraint on the powers of the High Court. The High Courts in India being the courts of unlimited jurisdiction, repository of all judicial power under the constitution except what is expressly excluded, have jurisdiction to issue to any person or authority including in appropriate cases, any Government within those territories directions, orders or writs, including writs in the nature of habeas corpus mandamus, prohibition, quo-warranto and certiorari, or any of them, for the enforcement of any of the rights conferred by Part III and for any other purpose.
45. In the case of U.P.State Co-operative Land Development bank Ltd. v. Chandra Bhan Dubey, (1999) 1 SCC 741, the Supreme Court, after considering many of its previous decisions referred to above on the point, held as under :
"The language of Article 226 does not admit of any limitation on the powers of the High Court of the exercise of jurisdiction thereunder though by various decisions of this Court with varying and divergent views, it has been held that jurisdiction under Article 226 can be exercised only when a body or authority the decision of which is complained, was exercising its power in the discharge of public duly and that writ is a public law remedy."
46. In Rohtas Industries Ltd. v. Rohtas Industries Staff Union, it was submitted before the Constitution Bench that an award under Section 10A of the Industrial Disputes Act, 1947, savours of a private arbitration and was not amenable to correction under Article 226 of the Constitution. The court said as under :
"9. The expansive and extraordinary power of the High Courts under Article 226 is as wide as the amplitude of the language used indicates and so can affect any person--even a private individual--and be available for any (other) purpose--even one for which another remedy may exist. The amendment to Article 226 in 1963 inserting Article 226 (1a) reiterates the targets of the writ power as inclusive of any person by the expressive reference to the residence of such person, but it is one thing to affirm the jurisdiction, another to authorise its free exercise like a bull in a China shop. This Court has spelt out wide and clear restraints on the use of this extraordinary remedy and High Courts will not go beyond those wholesome inhibitions except where the monstrosity of the situation or other exceptional circumstances cry for timely judicial interdict or mandate. The mentor of law is Justice and a potent drug should be judiciously administered. Speaking in critical retrospect and portentous prospect, the writ power has by and large, been the peoples sentinel on the qui vive and to cut back on or liquidate that power may cast a peril to human rights. We hold that the award here is not beyond the legal reach of Article 226, although this power must be kept in severely judicious leash."
47. In view of the aforesaid, we overrule the preliminary objection as raised on behalf of the respondent as regards the maintainability of the present writ-application and proceed to hold that the writ-application is maintainable.
48. The aforesaid now takes us to consider the case on merits. Before adverting to the rival submissions canvassed on either sides, we must first look into few conditions as prescribed in the tender notice.
Clause-2 : Experience Criteria : In respect of the filter applied for experience criteria, the Bidder or its OEM (themselves or through reseller(s)) should have regularly, manufactured and supplied same or similar category products to any Central/State Govt.
Organization/PSU/Public Listed Company for number of Financial years as indicated above in the bid document before the bid opening date. Copies of relevant contracts to be submitted along with bid in support of having supplied some quantity during each of the Financial Year. In case of bunch bids, the category of primary product having highest value should meet this criterion.
Clause-12 : The Bidder/OEM [themselves or through reseller(s)], should have executed project for supply and installation/commissioning of same or similar category products during preceding 3 financial years (i.e. current year and three previous financial years) as on opening of bid, as per following criteria :
(i) Single order of at least 35% of estimated bid value; or
(ii) Two orders of at least 20% each of estimated bid value; or
(iii) Three orders of at least 15% each of estimated bid value.
Satisfactory Performance certificate issued by respective Buyer Organization for the above Orders should be uploaded with bid. In case of bunch bids, the Category related to primary product having highest bid value should meet this criterion.
Clause-16 : Bidder's offer is liable to be rejected if they don't upload any of the certificates/documents sought in the Bid document, ATC and Corrigendum if any.
49. The writ-applicant submitted its bid on 17.8.2021. As per Clause-12, in the event the writ-applicant was relying on the three work orders executed by him for the supply of the same or similar category of products, then the said three work orders should be of Rs.38.82 crore each. The writ-applicant has relied on the three work orders as per Clause-12: (i) West Bengal Text Book Corporation Limited; (ii) Hindustan Times Limited; and (iii) Pritam Enterprise. On the date of the submission of the bid, the writ-applicant along with other documents also submitted (i) Purchase Order of the West Bengal Text Book Corporation Limited, (ii) Purchase Order of the Hindustan Times Limited, and (iii) Satisfactory Performance Certificate of the Pritam Enterprise.
50. The writ-applicant was entitled to and was granted two days' time to cure the defects post submission of his bid on 17.8.2021. Reliance has been placed on the following documents to contend the same :
Page 15 : Clause which specifically states that two days' time is granted for technical clarification.
Page 41A : E-mail from respondent requesting the writ- applicant to submit answer to the comments.
Page 51, Para F : Admission of Respondent in their affidavit that two days' time was given for technical clarification.
51. Therefore, two days' time was granted and during the said period the writ-applicant rectified the defects. In such circumstances, the writ-applicant ought not to have been disqualified on the ground of non-submission of the documents as per Clause-16.
52. Initially, the writ-applicant was shown to be technically unqualified relying on the Clause-12. Later on, once the writ- applicant uploaded the remaining documents as per the respondent's e-mail on Page 41/A, the respondent rejected the writ-applicant's bid relying on Clause-16, i.e. non-submission of the documents. Once again in the affidavit, altogether a new case appears to have been put up.
53. The writ-applicant has relied upon the Purchase Order dated 27.7.2018. As per Clause-12, the writ-applicant should have executed and supplied the same category of products either in the current year (2021-22) or three preceding financial years (2018-19, 2019-20 and 2020-2021) and the value of each such work order should be at least Rs.38.82 crore. The respondent appears to have dissected the composite work order dated 27.7.2018 into four different work orders and informed that two out of the four (WO) dated 12.2.2018 and 23.2.2018 were issued in the Financial Year 2017-18 and hence cannot be considered. For the other two, the Board says that the value as per the Clause-12 does not match.
54. It appears that the respondent has misconstrued the tender conditions. Page 27 of the Work Order clearly mentions that the earlier work orders stand 'revised' and the new date of delivery of 9000 MT must be completed by 15 th October 2018. Therefore, Clause-12 could be said to be as satisfied. Clause-12 only talks about when the work order value is 'supplied' and not about the date of issuance of the work order. Since the 'supply' was to be done by October 2018 and 'revised' work order was issued in July 2018, the work order of the West Bengal Text Book Corporation Limited satisfies all the criteria of Clause-12. The sum total of the work order comes to Rs.43.52 crore, i.e. above Rs.38.82 crore.
55. The case of the respondent is that the value of the work order does not fulfill the criteria as per the Clause-12. The said contention is baseless since the work order clearly mentions that the work order value is approximately Rs.62.52 crore (including GST), i.e. above Rs.38.82 crore, and the Satisfactory Performance Certificate is also uploaded.
56. The respondent has taken two-fold objections : (i) that the work order value is not as per Clause-12; and (ii) that Pritam Enterprise is a private entity and, therefore, such work order cannot be considered as per Clause-2. The correct position as we have noticed is as under :
(i) Work Order value is approximately Rs.44.98 crore, i.e. above Rs.38.82 crore, therefore, the first objection is baseless;
(ii) The respondent has in its reply brought out a new case for not considering Pritam Enterprise's work order. The respondent does not mention that Pritam Enterprise's work order is being rejected because it is a private party. Assuming that Clause-2 has to be considered, even then (i) Clause-2 cannot be read into Clause-12 since these are two distinct tender conditions. The Clause-2 falls under the 'Bid Document' and Clause-12 falls under the 'Buyer Added Bid Specific Additional Terms and Conditions'; (ii) Clause-2 talks about 'Experience Criteria' wherein the writ-applicant is obliged to submit copies of the relevant contracts of having supplied some quantity of products to any Central/State Government Organization/PSU/Public Listed Company. In the present case, the writ-applicant could be said to have satisfied such condition. The writ-applicant has effected supplies to the State Government Organization, namely, the West Bengal Text Book Corporation Limited, for the last three years and reliance is placed on the certificate issued by the Chartered Accountant.
57. The experience criteria for 'any Central/State Government Organization/PSU/ Public Listed Company, by furnishing of the turnover certificate, could be said to have been complied. It would not lie in the mouth of the respondent now to say that since the Pritam Enterprise is a private entity, its work order would not be considered.
58. We should also not overlook the fact that the ouster or disqualification of the writ-applicant from the tender process may lead to loss of Rs.15 crore towards the public exchequer.
59. It appears that the price bid of L1 is substantially on a higher side compared to the price bid of the writ-applicant. At this stage, we may observe that just because the Board may be in a position to save Rs.15 crore by itself should not be a ground to permit a participant to offer his bid in the tender process if he is otherwise found to be not fulfilling the terms and conditions of the tender document. The bidders participating in the tender process cannot, therefore, insist that their tenders should be accepted simply because a given tender is the highest or lowest depending upon whether the contract is for sale of public property or for execution of works on behalf of the State or its instrumentalities. There is no doubt that precedence should be first given to the eligibility criteria and also the other terms and conditions. Here is a case wherein not only it could be said that the writ-applicant has been wrongly disqualified but if he is permitted to participate, then the Board may be able to save around Rs.15 crore towards the public exchequer. This is something which we should not ignore or overlook.
LAW ON THE SUBJECT :
60. The scope of judicial review in contractual matters is no longer res integra. The Supreme Court, in Tata Cellular v. Union of India, (1994) 6 SCC 651, held that while the principles of judicial review would apply to the exercise of the contractual powers, the same were accompanied with inherent limitations and that a right balance had to be struck between the administrative discretion to decide matters and the need to remedy any unfairness or arbitrariness by judicial review. In paragraph 94 of the said judgment, the following principles were deduced :
"(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 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 malafides.
(6) Quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure."
61. In Poddar Steel Corporation (supra), the Supreme Court drew a distinction between an essential condition of eligibility and others which are merely ancillary or subsidiary and held as under :
"It is true that in submitting its tender accompanied by a cheque of the Union Bank of India and not of the State Bank the clause No. 6 of the tender notice was not obeyed literally, but the question is as to whether the said non- compliance deprived the Diesel Locomotive Works of the authority to accept the bid. As a matter of general proposition it cannot be held that an authority inviting tenders is bound to give effect to every term mentioned in the notice in meticulous detail, and is not entitled to waive even a technical irregularity of little or no significance. The requirements in a tender notice can be classified into two categories-those which lay down the essential conditions of eligibility and the others which are merely ancillary or subsidiary with the main object to be achieved by the condition. In the first case the authority issuing the tender may be required to enforce them rigidly. In the other cases it must be open to the authority to deviate from and not to insist upon the strict literal compliance of the condition in appropriate cases. This aspect was examined by this Court in G.J. Fernandez v. State of Karnataka (1990) 2 SCC 488 a case dealing with tenders. Although not in an entirely identical situation as the present one, the observations in the judgment support our view. The High Court has, in the impugned decision, relied upon Ramana Dayaram Shetty v. International Airport Authority of India (1979) 3 SCC 489 : (AIR 1979 SC 1628) but has failed to appreciate that the reported case belonged to the first category where the strict compliance of the condition could be insisted upon. The authority in that case, by not insisting upon the requirement in the tender notice which was an essential condition of eligibility, bestowed a favour on one of the bidders, which amounted to illegal discrimination. The judgment indicates that the Court closely examined the nature of the condition which had been relaxed and its impact before answering the question whether it could have validly condoned the shortcoming in the tender in question. This part of the judgment demonstrates the difference between the two categories of the conditions discussed above. However it remains to be seen as to which of the two clauses, the present case belongs."
62. In B.S.N. Joshi and Sons Ltd. (supra), the Supreme Court in paragraph 66 after noticing various pronouncements of the Supreme Court on the subject deduced the principles of judicial review in paragraph 66, which reads as under :
"i) If there are essential conditions, the same must be adhered to;
ii) If there is no power of general relaxation, ordinarily the same shall not be exercised and the principle of strict compliance would be applied where it is possible for all the parties to comply with all such conditions fully;
iii) If, however, a deviation is made in relation to all the parties in regard to any of such conditions, ordinarily again a power of relaxation may be held to be existing.
iv) The parties who have taken the benefit of such relaxation should not ordinarily be allowed to take a different stand in relation to compliance of another part of tender contract, particularly when he was also not in a position to comply with all the conditions of tender fully, unless the Court otherwise finds relaxation of a condition which being essential in nature could not be relaxed and thus the same was wholly illegal and without jurisdiction.
v) When a decision is taken by the appropriate authority upon due consideration of the tender document submitted by all the tenderers on their own merits and if it is ultimately found that successful bidders had in fact substantially complied with the purport and object for which essential conditions were laid down, the same may not ordinarily be interfered with.
(vi) The contractors cannot form a cartel. If despite the same, their bids are considered and they are given an offer to match with the rates quoted by the lowest tenderer, public interest would be given priority.
(vii) Where a decision has been taken purely on public interest, the Court ordinarily should exercise judicial restraint."
63. In M/s. Master Marine Services Pvt. Ltd. v. Metcalfe & Hodgkinson Pvt. Ltd., reported in (2005) 6 SCC 138, and Jagdish Mandal v. State of Orissa, reported in (2007) 14 SCC 517, the Supreme Court crystallized the following tests for judicial review in administrative action.
"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 bonafide 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. The tenderer or contractor with a grievance can always seek damages in a civil court. Attempts by unsuccessful tenderers with imaginary grievances, wounded pride and business rivalry, to make mountains out of molehills of some technical/ procedural violation or some prejudice to self, and persuade courts to interfere by exercising power of judicial review, should be resisted. Such interferences, either interim or final, may hold up public works for years, or delay relief and succour to thousands and millions and may increase the project cost manifold. 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.-
ii) Whether public interest is affected.
If the answers are in the negative, there should be no interference under Article 226. Cases involving black-listing or imposition of penal consequences on a tenderer/ contractor or distribution of State largesse (allotment of sites/shops, grant of licences, dealerships and franchises) stand on a different footing as they may require a higher degree of fairness in action."
64. In Reliance Airport Developers Pvt. Ltd. v. Airports Authority of India, reported in (2006) 10 SCC 1, the Supreme Court held that judicial review was intended to prevent arbitrariness and must be exercised in larger public interest.
65. In Tejas Construction and Infrastructure Pvt. Ltd. v. Municipal Council, Sendhwa, reported in (2012) 6 SCC 464, the position of law as stated hereinabove was reiterated.
66. In Michigan Rubber (India) Limited v. State of Karnataka, reported in (2012) 8 SCC 216, the Supreme Court held that the basic requirement of Article 14 was fairness in action by the State, and non-arbitrariness in essence and substance is the heartbeat of fair play. In paragraph 23 of the judgment, it was held as under :
"From the above decision, 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."
67. In Ramana Dayaram Shetty v. International Airport Authority of India, reported in (1979) 3 SCC 489, the Supreme Court held that the words used in a document are not superfluous or redundant but must be given some meaning and weightage.
68. It is a well-settled rule of interpretation applicable alike to documents as to statutes that, save for compelling necessity, the court should not be prompt to ascribe superfluity to the language of a document and "should be rather at the outset inclined to suppose every word intended to have some effect or be of some use". To reject words as insensible should be the last resort of judicial interpretation, for it is an elementary rule based on common sense that no author of a formal document intended to be acted upon by the others should be presumed to use words without a meaning. The court must, as far as possible, avoid a construction which would render the words used by the author of the document meaningless and futile or reduce to silence any part of the document and make it altogether inapplicable.
69. In G.J. Fernandez v. State of Karnataka, reported in (1990) 2 SCC 488, both the principles laid down in Ramana Dayaram Shetty (supra) were reaffirmed. It was reaffirmed that the party issuing the tender (the employer) has "the right to punctiliously and rigidly" enforce the terms of the tender. If a party approaches a court for an order restraining the employer from strict enforcement of the terms of the tender, the court would decline to do so. It was also reaffirmed that the employer could deviate from the terms and conditions of the tender if the "changes affected all intending applicants alike and were not objectionable". Therefore, deviation from the terms and conditions is permissible so long as the level playing field is maintained and it does not result in any arbitrariness or discrimination in the Ramana Dayaram Shetty sense.
70. The Supreme Court, in the case of Vidarbha Irrigation Development Corporation v. Anoj Kumar Garwala, reported in (2019) 2 SCALE 134, has observed in paragraphs 14 and 15 as under :
"14. However, learned counsel appearing on behalf of the appellant strongly relied upon Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corpn. Ltd., (2016) 16 SCC 818, and paragraphs 14 and 15 in particular, which state:
"14. We must reiterate the words of caution that this Court has stated right from the time when Ramana Dayaram Shetty v. International Airport Authority of India [(1979) 3 SCC 489] was decided almost 40 years ago, namely, that the words used in the tender documents cannot be ignored or treated as redundant or superfluous -- they must be given meaning and their necessary significance. In this context, the use of the word "metro" in Clause 4.2(a) of Section III of the bid documents and its connotation in ordinary parlance cannot be overlooked.
15. We may add that the owner or the employer of a project, having authored the tender documents, is the best person to understand and appreciate its requirements and interpret its documents. The constitutional courts must defer to this understanding and appreciation of the tender documents, unless there is malafide or perversity in the understanding or appreciation or in the application of the terms of the tender conditions. It is possible that the owner or employer of a project may give an interpretation to the tender documents that is not acceptable to the constitutional courts but that by itself is not a reason for interfering with the interpretation given."
15. It is clear even on a reading of this judgment that the words used in the tender document cannot be ignored or treated as redundant or superfluous - they must be given meaning and their necessary significance. Given the fact that in the present case, an essential tender condition which had to be strictly complied with was not so complied with, the appellant would have no power to condone lack of such strict compliance. Any such condonation, as has been done in the present case, would amount to perversity in the understanding or appreciation of the terms of the tender conditions, which must be interfered with by a constitutional court."
71. In Central Coalfields Limited and another v. SLL-SML (Joint Venture Consortium) and others, reported in (2016) 8 SCC 622, the Supreme Court has explained the true purport of its earlier decision in the case of Poddar Steel Corporation (supra). We quote the relevant observations thus :
"39. Poddar Steel was a rather interesting case and added a new dimension to the discourse. The decision of the Allahabad High Court records that the relevant clause in the NIT gave the bidder the option of depositing the earnest money in cash or by a "demand draft drawn on DLW Branch of SBI in favour of Assistant Chief Cashier, DLW/- Varanasi." (Ganesh Engineering Works v. Union of India and others, 1990 All. LJ 1140) As many as 21 parties had responded to the NIT, but 8 of them had not deposited any earnest money at all and the remaining 13 bidders had "deposited the earnest money by one mode or the other but not necessarily in the manner provided in the NIT except perhaps a few." The Tender Committee deviated from the terms of the NIT and considered the bids of these 13 bidders and accepted the bid of Poddar Steel, who had given the earnest money not by cash or a demand draft but by "a loose cheque drawn on its C/D account in the Union Bank of India, Sonarpura, Varanasi." On the issue of discriminatory treatment, the contention of the employer was that since all the 13 bidders who had made the earnest money deposit were treated equally, there was no issue of any discriminatory treatment.
40. However, the High Court took the view, following Ramana Dayaram Shetty and the privilege-of-participation principle, that it was possible that if those who did not deposit any earnest money had known that a crossed cheque (drawn on a bank other than SBI) towards earnest money was acceptable to the employer, they too could have been in the fray. Under these circumstances, the High Court held that excluding them from competition, through this unannounced deviation affecting bidders and potential bidders alike, rendered the bidding process unfair. The High Court introduced an "essential term" concept and held that the clause in the NIT relating to deposit of earnest money was an essential term thereof and could not be deviated from. The Allahabad High Court held:
"The mere fact that all the tenderers who had deposited the earnest money, whether in terms of Clause 6 or not had been treated alike cannot make any difference. It is quite possible to visualise that the parties who had failed to deposit the earnest money may also have been in the fray had they known that earnest money through cheque was also acceptable.
Thus they have obviously been deprived from competing with others and this makes the action of Respondents 1 to 5 unfair when condition No. 6 of the NIT so specifically points out that deposit of earnest money in any other mode except in cash or by demand draft would not be acceptable. It leads us to think that this was an essential precondition for submitting tenders and the Respondents were not entitled to deviate from this. All tenders which were not accompanied by deposit of earnest money strictly in the manner indicated in the NIT deserved to be rejected. We reject the contention of the Respondents that the earnest money could be accepted even when it was deposited by some mode other than those in NIT. We also hold that Clause 6 of NIT is not merely ancillary or subordinate condition but in view of the language in which is couched the same was a crucial and essential terms of the tender which could not be deviated from."
41. In appeal, this Court accepted the theory of essential and non-essential or ancillary or subsidiary terms of an NIT. It was held that the cheque of the Union Bank of India issued by Poddar Steel (though a deviation from the terms of the NIT) was sufficient for meeting the conditions of the NIT, the condition being ancillary or subsidiary to the main object to be achieved by the condition and that the employer could waive the "technical literal compliance" of the earnest money clause of the NIT "specially when it was in its interest not to reject the said bid which was the highest." In other words, this Court concluded that an essential term of the tender document could not be deviated from but an ancillary or subsidiary or non-essential term could be deviated from, and that the deviation could be without any reference to potential bidders.
42. Unfortunately, this Court did not at all advert to the privilege-of-participation principle laid down in Ramana Dayaram Shetty and accepted in G. J. Fernandez. In other words, this Court did not consider whether, as a result of the deviation, others could also have become eligible to participate in the bidding process. This principle was ignored in Poddar Steel.
43. Continuing in the vein of accepting the inherent authority of an employer to deviate from the terms and conditions of an NIT, and re-introducing the privilege-of- participation principle and the level playing field concept, this Court laid emphasis on the decision making process, particularly in respect of a commercial contract. One of the more significant cases on the subject is the three-judge decision in Tata Cellular v. Union of India (1994) 6 SCC 651 which gave importance to the lawfulness of a decision and not its soundness. If an administrative decision, such as a deviation in the terms of the NIT is not arbitrary, irrational, unreasonable, malafide or biased, the Courts will not judicially review the decision taken. Similarly, the Courts will not countenance interference with the decision at the behest of an unsuccessful bidder in respect of a technical or procedural violation....
46. It is true that in Poddar Steel and in Rashmi Metaliks a distinction has been drawn by this Court between essential and ancillary and subsidiary conditions in the bid documents. A similar distinction was adverted to more recently in Bakshi Security and Personnel Services Pvt. Ltd. v. Devkishan Computed Pvt. Ltd. 2016 (7) SCALE 425 through a reference made to Poddar Steel. In that case, this Court held a particular term of the NIT as essential (confirming the view of the employer) and also referred to the "admonition" given in Jagdish Mandal followed in, (2012) 8 SCC 216. Thereafter, this Court rejected the challenge to the employer's decision holding Bakshi Security and Personnel Services ineligible to participate in the tender.
47. The result of this discussion is that the issue of the acceptance or rejection of a bid or a bidder should be looked at not only from the point of view of the unsuccessful party but also from the point of view of the employer. As held in Ramana Dayaram Shetty the terms of the NIT cannot be ignored as being redundant or superfluous. They must be given a meaning and the necessary significance. As pointed out in Tata Cellular there must be judicial restraint in interfering with administrative action. Ordinarily, the soundness of the decision taken by the employer ought not to be questioned but the decision making process can certainly be subject to judicial review. The soundness of the decision may be questioned if it is irrational or malafide or intended to favour someone or a decision "that no responsible authority acting reasonably and in accordance with relevant law could have reached" as held in Jagdish Mandal followed in Michigan Rubber.
48. Therefore, whether a term of the NIT is essential or not is a decision taken by the employer which should be respected. Even if the term is essential, the employer has the inherent authority to deviate from it provided the deviation is made applicable to all bidders and potential bidders as held in Ramana Dayaram Shetty. However, if the term is held by the employer to be ancillary or subsidiary, even that decision should be respected. The lawfulness of that decision can be questioned on very limited grounds, as mentioned in the various decisions discussed above, but the soundness of the decision cannot be questioned, otherwise this Court would be taking over the function of the tender issuing authority, which it cannot.
49. Again, looked at from the point of view of the employer if the Courts take over the decision-making function of the employer and make a distinction between essential and non-essential terms contrary to the intention of the employer and thereby re-write the arrangement, it could lead to all sorts of problems including the one that we are grappling with. For example, the GTC that we are concerned with specifically states in Clause 15.2 that "Any Bid not accompanied by an acceptable Bid Security/EMD shall be rejected by the employer as non-responsive." Surely, CCL ex facie intended this term to be mandatory, yet the High Court held that the bank guarantee in a format not prescribed by it ought to be accepted since that requirement was a non- essential term of the GTC. From the point of view of CCL the GTC has been impermissibly re-written by the High Court."
72. The decision in the case of Poddar Steel Corporation (supra) was doubted by the Supreme Court in the later decision in Central Coalfields Ltd. (supra). In that case, the Court observed that the "issue of acceptance or rejection of a bid of a bidder should be looked at not only from the point of view of an unsuccessful party but also from the point of view of the employer." The Supreme Court reiterated the principal that the soundness of an administrative decision may be questioned only if it is irrational or malafide or intended to favour someone. It referred to its earlier decisions in Jagdish Mandal v. State of Orissa, (2007) 14 SCC 517 and M/s Michigan Rubber (I) Ltd. v. State of Karnataka, (2012) 8 SCC 216, wherein the Court had opined that a decision which no responsible authority acting reasonably and in accordance with relevant law could have reached, was also susceptible to challenge on that ground.
73. In Raunaq International Ltd. v. I.V.R. Construction Ltd., reported in (1999) 1 SCC 492, the Supreme Court held that the superior courts should not interfere in matters of tenders unless substantial public interest was involved or the transaction was malafide.
74. In Air India Limited v. Cochin International Airport Ltd., reported in (2000) 2 SCC 617, the Supreme Court once again stressed the need for overwhelming public interest to justify judicial intervention in contracts involving the State and its instrumentalities. It was held that the courts must proceed with great caution while exercising their discretionary powers and should exercise these powers only in furtherance of public interest and not merely on making out a legal point.
75. In Master Marine Services (P) Ltd. v. Metcalfe & Hodgkinson (P) Ltd., reported in (2005) 6 SCC 138, it was held that while exercising power of judicial review in respect of contracts, the Court should concern itself primarily with the question, whether there has been any infirmity in the decision-making process. By way of judicial review, the court cannot examine the details of the terms of contract which have been entered into by the public bodies or State.
76. In Jagdish Mandal v. State of Orissa, reported in (2007) 14 SCC 517, it was held:
"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 bonafide 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. The tenderer or contractor with a grievance can always seek damages in a civil court. Attempts by unsuccessful tenderers with imaginary grievances, wounded pride and business rivalry, to make mountains out of molehills of some technical/procedur
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al violation or some prejudice to self, and persuade courts to interfere by exercising power of judicial review, should be resisted. Such interferences, either interim or final, may hold up public works for years, or delay relief and succour to thousands and millions and may increase the project cost manifold........" 77. In Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corporation Ltd., reported in (2016) 16 SCC 818, it was held that 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 malafides, 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. The owner or the employer of a project, having authored the tender documents, is the best person to understand and appreciate its requirements and interpret its documents. It is possible that the owner or employer of a project may give an interpretation to the tender documents that is not acceptable to the constitutional Courts but that by itself is not a reason for interfering with the interpretation given. 78. In Montecarlo v. NTPC Ltd., reported in AIR 2016 SC 4946, it was held that where a decision is taken that is manifestly in consonance with the language of the tender document or sub-serves the purpose for which the tender is floated, the court should follow the principle of restraint. Technical evaluation or comparison by the court would be impermissible. The principle that is applied to scan and understand an ordinary instrument relatable to contract in other spheres has to be treated differently than interpreting and appreciating tender documents relating to technical works and projects requiring special skills. The owner should be allowed to carry out the purpose and there has to be allowance of free play in the joints. 79. Most recently the Supreme Court in Caretel Infotech Limited v. Hindustan Petroleum Corporation Limited and Others, reported in (2019) 6 SCALE 70, observed that a writ petition under Article 226 of the Constitution of India was maintainable only in view of government and public sector enterprises venturing into economic activities. This Court observed that there are various checks and balances to ensure fairness in procedure. It was observed that the window has been opened too wide as every small or big tender is challenged as a matter of routine which results in government and public sectors suffering when unnecessary, close scrutiny of minute details is done. 80. The Supreme Court, in SILPPI Constructions Contractors v. Union of India and another [Special Leave Petition (Civil) Nos.13802-13805 of 2019, decided on 21 st June 2019], observed in paragraphs 19 and 20 as under : "19. This Court being the guardian of fundamental rights is duty bound to interfere when there is arbitrariness, irrationality, malafides and bias. However, this Court in all the aforesaid decisions 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. As laid down in the judgments cited above 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. 20. The essence of the law laid down in the judgments referred to above is the exercise of restraint and caution; the need for overwhelming public interest to justify judicial intervention in matters of contract involving the state instrumentalities; the courts should give way to the opinion of the experts unless the decision is totally arbitrary or unreasonable; the court does not sit like a court of appeal over the appropriate authority; the court must realise that the authority floating the tender is the best judge of its requirements and, therefore, the court's interference should be minimal. The authority which floats the contract or tender, and has authored the tender documents is the best judge as to how the documents have to be interpreted. If two interpretations are possible then the interpretation of the author must be accepted. The courts will only interfere to prevent arbitrariness, irrationality, bias, malafides or perversity. With this approach in mind we shall deal with the present case." 81. Thus, from the aforesaid discussion of the case-law what is discernible is that the court must, as far as possible, avoid a construction which would render the words used by the author of the tender document meaningless and futile. The court would not ascribe superfluity to the language of a document. The court would necessarily examine the decision making process to ascertain whether the process adopted or decision made by the authority is malafide or arbitrary and irrational or is such that no such authority acting reasonably and in accordance with the relevant law could have reached, and whether the decision is against the public interest. As observed in Central Coalfields Limited (supra) that if an administrative decision, even a deviation in the terms of the notice inviting tender, if it is not arbitrary, irrational, unreasonable, malafide or biased, the courts would be loath to undertake judicial review of such decision. Also the courts would not countenance interference with the decision at the behest of an unsuccessful bidder in respect of a technical or procedural violation. The employer of a project, having authored the tender documents, is the best person to understand and appreciate its requirements and interpret its documents. The constitutional courts must defer to this understanding and appreciation of the tender documents, unless there is malafide or perversity in the understanding or appreciation or in the application of the terms of the tender conditions. The participating bidders are entitled to a fair, equal and non-discriminatory treatment in the matter of evaluation of their tenders. 82. In the result, this writ-application succeeds and is hereby allowed. We hold that the decision of the respondent society to disqualify the writ-applicant from the tender process is not sustainable in law. The respondent society is directed to consider the technical bid of the writ-applicant and thereafter proceed further in accordance with law. 83. We clarify that we have confined our adjudication only to the extent whether the writ-applicant could have been disqualified at the stage of the scrutiny of the technical bid.