w w w . L a w y e r S e r v i c e s . i n



M/s. Ashodaya Cement Products, Rep. by its Partner G. Harish & Others v/s Bangalore Electricity Supply Company Ltd., Rep. by Managing Director & Others


Company & Directors' Information:- BANGALORE ELECTRICITY SUPPLY COMPANY LIMITED [Active] CIN = U04010KA2002SGC030438

Company & Directors' Information:- CEMENT CORPORATION OF INDIA LIMITED [Active] CIN = U74899DL1965GOI004322

Company & Directors' Information:- J. K. CEMENT LIMITED. [Active] CIN = L17229UP1994PLC017199

Company & Directors' Information:- CEMENT INDIA LTD [Active] CIN = U26942AS1994PLC004154

Company & Directors' Information:- HARISH CEMENT LIMITED [Active] CIN = U26941HP1996PLC019173

Company & Directors' Information:- P P PRODUCTS PVT LTD [Active] CIN = U32305WB1991PTC051091

Company & Directors' Information:- K K PRODUCTS LIMITED [Active] CIN = U31300DL1991PLC045521

Company & Directors' Information:- K B PRODUCTS PRIVATE LIMITED [Active] CIN = U51909MH2007PTC169627

Company & Directors' Information:- A M S CEMENT PVT LTD [Active] CIN = U26942ML1995PTC004606

Company & Directors' Information:- S. P. CEMENT PRIVATE LIMITED [Active] CIN = U26940MP2006PTC018404

Company & Directors' Information:- S. P. CEMENT PRIVATE LIMITED [Active] CIN = U01531MP2006PTC018404

Company & Directors' Information:- K G PRODUCTS PRIVATE LIMITED [Active] CIN = U51909PB2007PTC031201

Company & Directors' Information:- S S P PRODUCTS PRIVATE LIMITED [Active] CIN = U22110WB1974PTC210201

Company & Directors' Information:- M L B PRODUCTS PRIVATE LIMITED [Active] CIN = U74899DL1990PTC040990

Company & Directors' Information:- M M PRODUCTS LIMITED [Strike Off] CIN = U28994DL1992PLC050955

Company & Directors' Information:- Y AND M CEMENT (INDIA) PRIVATE LIMITED [Active] CIN = U26940MH2006PTC161339

Company & Directors' Information:- M P K PRODUCTS PVT LTD [Active] CIN = U26919AS1994PTC004183

Company & Directors' Information:- G K PRODUCTS PRIVATE LIMITED [Active] CIN = U74899DL1991PTC043260

Company & Directors' Information:- S D CEMENT PRIVATE LIMITED [Active] CIN = U74899DL1995PTC072298

Company & Directors' Information:- N R PRODUCTS PRIVATE LIMITED [Strike Off] CIN = U51109AS1998PTC005561

Company & Directors' Information:- C L PRODUCTS INDIA LIMITED [Active] CIN = U51909DL2002PLC116975

Company & Directors' Information:- K. S. A. PRODUCTS PRIVATE LIMITED [Active] CIN = U51220PB2014PTC039023

Company & Directors' Information:- P B CEMENT PRIVATE LIMITED [Active] CIN = U36900WB2009PTC138825

Company & Directors' Information:- D. R. PRODUCTS PRIVATE LIMITED [Active] CIN = U52320DL2011PTC213508

Company & Directors' Information:- R S PRODUCTS PRIVATE LIMITED [Active] CIN = U74899DL1989PTC036603

Company & Directors' Information:- R R PRODUCTS PRIVATE LIMITED [Active] CIN = U24249HR1999PTC034291

Company & Directors' Information:- I G PRODUCTS PRIVATE LIMITED [Active] CIN = U74999WB2012PTC183503

Company & Directors' Information:- K G N CEMENT PRIVATE LIMITED [Active] CIN = U26942OR1991PTC002930

Company & Directors' Information:- A S K CEMENT PRIVATE LIMITED [Active] CIN = U26940RJ2012PTC040014

Company & Directors' Information:- V K CEMENT LTD [Active] CIN = U26942PB1994PLC014122

Company & Directors' Information:- J D CEMENT PVT LTD [Active] CIN = U26941CH1982PTC004960

Company & Directors' Information:- B S CEMENT PVT. LTD. [Active] CIN = U26942OR1986PTC001767

Company & Directors' Information:- J S R PRODUCTS PRIVATE LIMITED [Active] CIN = U31908DL2007PTC170841

Company & Directors' Information:- C F C PRODUCTS PRIVATE LIMITED [Active] CIN = U28129DL1998PTC095531

Company & Directors' Information:- M P CEMENT PVT LTD [Strike Off] CIN = U26942CT1984PTC002333

Company & Directors' Information:- J K CEMENT PVT LTD [Strike Off] CIN = U26941GJ1981PTC004569

Company & Directors' Information:- M S PRODUCTS PRIVATE LIMITED [Strike Off] CIN = U74899DL1993PTC055125

Company & Directors' Information:- B R PRODUCTS PRIVATE LIMITED [Active] CIN = U31909DL1999PTC100727

Company & Directors' Information:- S P B PRODUCTS LIMITED [Active] CIN = U51909DL1996PLC082631

Company & Directors' Information:- G K D PRODUCTS PRIVATE LIMITED [Active] CIN = U15431WB1998PTC086840

Company & Directors' Information:- M B R PRODUCTS PRIVATE LIMITED [Strike Off] CIN = U17111WB1993PTC060806

Company & Directors' Information:- J D CEMENT LIMITED [Strike Off] CIN = U26943DL1980PLC010512

Company & Directors' Information:- J S K CEMENT PRIVATE LIMITED [Active] CIN = U26940RJ2012PTC039836

Company & Directors' Information:- P D PRODUCTS PRIVATE LIMITED [Active] CIN = U23201DL2000PTC108462

Company & Directors' Information:- S K M PRODUCTS PRIVATE LIMITED [Active] CIN = U18101DL1998PTC093415

Company & Directors' Information:- H R PRODUCTS PRIVATE LIMITED [Strike Off] CIN = U74899DL1978PTC009183

Company & Directors' Information:- J G CEMENT PVT LTD [Strike Off] CIN = U14106PB1993PTC013626

Company & Directors' Information:- V S PRODUCTS PRIVATE LIMITED [Active] CIN = U36900DL2008PTC185445

Company & Directors' Information:- H K PRODUCTS LIMITED [Active] CIN = U51900GJ2015PLC085457

Company & Directors' Information:- S R K PRODUCTS PRIVATE LIMITED [Active] CIN = U51221KA1989PTC010032

Company & Directors' Information:- G M PRODUCTS PRIVATE LIMITED [Active] CIN = U74899DL1991PTC044687

Company & Directors' Information:- V T N PRODUCTS PVT LTD [Active] CIN = U51109WB1996PTC080094

Company & Directors' Information:- W S T Q PRODUCTS PRIVATE LIMITED [Active] CIN = U31300DL1999PTC102655

Company & Directors' Information:- J M K PRODUCTS PRIVATE LIMITED [Strike Off] CIN = U24246OR2005PTC008446

Company & Directors' Information:- G S T PRODUCTS (INDIA) PRIVATE LIMITED [Strike Off] CIN = U31909TN2006PTC059575

Company & Directors' Information:- R. M. CEMENT COMPANY PRIVATE LIMITED [Active] CIN = U26941CT2009PTC021396

Company & Directors' Information:- S M P PRODUCTS PRIVATE LIMITED [Active] CIN = U25200DL2009PTC190965

Company & Directors' Information:- S N S PRODUCTS PRIVATE LIMITED [Active] CIN = U15490DL2005PTC142749

Company & Directors' Information:- U B PRODUCTS PRIVATE LIMITED [Active] CIN = U51224DL2002PTC116457

Company & Directors' Information:- A R CEMENT CO PVT LTD [Strike Off] CIN = U02694MP1982PTC002042

Company & Directors' Information:- A AND A PRODUCTS PRIVATE LIMITED [Active] CIN = U21098MP2004PTC017128

Company & Directors' Information:- V J PRODUCTS PRIVATE LIMITED [Active] CIN = U36900GJ2011PTC065252

Company & Directors' Information:- S AND A PRODUCTS PRIVATE LIMITED [Strike Off] CIN = U51311DL1991PTC042938

Company & Directors' Information:- S AND G PRODUCTS PRIVATE LIMITED [Strike Off] CIN = U51909DL1982PTC014843

Company & Directors' Information:- B P PRODUCTS PRIVATE LIMITED [Strike Off] CIN = U24241WB1999PTC089499

Company & Directors' Information:- D AND P PRODUCTS LIMITED [Amalgamated] CIN = U99999MH1951PTC008422

Company & Directors' Information:- K L CEMENT PRIVATE LIMITED [Strike Off] CIN = U26940WB2008PTC127270

Company & Directors' Information:- S D H PRODUCTS PRIVATE LIMITED [Strike Off] CIN = U55204KA2006PTC040734

Company & Directors' Information:- V M PRODUCTS PRIVATE LIMITED [Active] CIN = U24100DL2014PTC266679

Company & Directors' Information:- M C A CEMENT PRIVATE LIMITED [Active] CIN = U26943RJ1994PTC008065

Company & Directors' Information:- E C A PRODUCTS PRIVATE LIMITED [Strike Off] CIN = U27209TN1987PTC014022

Company & Directors' Information:- HARISH INDIA PRIVATE LIMITED [Active] CIN = U29299MH1959PTC011457

Company & Directors' Information:- R S CEMENT PRIVATE LIMITED. [Active] CIN = U74899DL1992PTC047484

Company & Directors' Information:- HARISH AND COMPANY PRIVATE LIMITED [Converted to LLP and Dissolved] CIN = U45201RJ1995PTC010374

Company & Directors' Information:- S. K. CEMENT PRIVATE LIMITED [Active] CIN = U26960WB2012PTC187806

Company & Directors' Information:- G S PRODUCTS LIMITED [Strike Off] CIN = U25191UP1989PLC010483

Company & Directors' Information:- A R K PRODUCTS PRIVATE LIMITED [Strike Off] CIN = U24231UP1978PTC004606

Company & Directors' Information:- S. M. PRODUCTS PRIVATE LIMITED [Strike Off] CIN = U17299DL1966PTC004634

Company & Directors' Information:- R. M. R. PRODUCTS PRIVATE LIMITED [Active] CIN = U74999MH2017PTC298120

Company & Directors' Information:- P & Q PRODUCTS PRIVATE LIMITED [Strike Off] CIN = U51909DL2014PTC269162

Company & Directors' Information:- D & D CEMENT PRIVATE LIMITED [Strike Off] CIN = U26941GJ2009PTC057912

Company & Directors' Information:- HARISH PRODUCTS PVT LTD [Converted to LLP] CIN = U27310GJ1978PTC003189

Company & Directors' Information:- H T PRODUCTS PVT LTD [Strike Off] CIN = U29266WB1981PTC033424

Company & Directors' Information:- PRODUCTS (INDIA) LTD [Strike Off] CIN = U31901WB1961PLC024991

Company & Directors' Information:- M PRODUCTS & CO PVT LTD [Strike Off] CIN = U51909WB1956PTC023215

Company & Directors' Information:- CEMENT PRODUCTS PVT LTD [Not available for efiling] CIN = U99999AP2000PTC900031

    W.P. Nos. 55568 - 55576 & 55911, 55407 of 2018 (GM - TEN)

    Decided On, 30 January 2019

    At, High Court of Karnataka

    By, THE HONOURABLE MRS. JUSTICE S. SUJATHA

    For the Petitioner: Vivek Holla, Santhosh Gogi, K.V. Aravind, Advocates. For the Respondent: S. Naganand, Senior Counsel a/w S. Sriranga, Advocate, Jyothi, AGA.



Judgment Text


1. These petitions involving similar and akin issues, have been considered together and are taken up for final disposal at this stage with the consent of the learned counsel appearing for the parties.

2. The petitioners have assailed the tender bearing Enquiry Nos.BESCOM/BCP-11092/2018- 19/BMAZ, BESCOM/BCP-1093/2018-19/BRC, BESCOME/BCP-1094/2018-19/ Ramanagara Circle, BESCOM/BCP-1095/2018-19/ Kolar Circle, BESCOM/BCP-1095/2018-19/ Kolar Circle, BESCOM/BCP-1096/2018-19/ Tumkur Circle and BESCOM/BCP-1097/2018-19/ Davanagere Circle, all dated 23.11.2018 issued by the respondents in so far as Clauses 5[b] to [d] are concerned.

3. The petitioners are claiming to be the registered proprietorship concerns and partnership firms engaged in the business of manufacturing, testing and supply of Prestressed Cement Concrete Poles [PSCC] and Reinforced Cement Concerte [RCC] Poles of different dimensions and are into manufacturing, testing and supply of PSCC and RCC poles to BESCOM and to various contractors under Turnkey Projects who in turn carry out work for Electricity Supply Companies and other private purchasers. It is contended by the petitioners that they have participated in various tenders and Turnkey Projects, by manufacturing, testing and supply of PSCC and RCC poles and ESCOMs. The BESCOM and Contractors have issued certificate of merits to the petitioners considering the successful and satisfactory job maintained in the quality of poles and timely delivery including the BESCOM.

4. It is contended that the respondent Nos.2 and 3 have called for tenders for supply of RCC and PSCC poles for 6 Circles of BESCOM under different notifications through e-procurement portal. The tender notifications issued by the respondents prescribes the qualifying requirements for the bidders. The petitioners are aggrieved by the Clauses 5[b][c] and [d] of the tender notifications dated 23.11.2018. Hence, these writ petitions.

5. Learned counsel Sri.Vivek Holla representing the petitioners' counsel, during the course of arguments would restrict the scope of the writ petitions to the clauses 5 [c] and [d] of the tender notification. It was submitted that the petitioners possess adequate experience to supply PSCC and RCC poles to various contractors under Turnkey Projects but such an experience possessed by them would not avail them to participate in the tender process in view of the Clauses 5[c] and [d]. Sub-clauses [c] and [d] of Clause 5 now structured, only qualifies such class of manufactures and vendors who are supplying to the ESCOMs and PSCCs to participate in the tender process resulting in the elimination of other players who are in the business of supplying the RCC and PSCC poles to Private entities which would tantamount to discrimination without basis and has no nexus to the objective that is sought to be achieved.

6. The learned Senior Counsel contended that the said qualifying clause has no bearing on the quality of the material to be supplied or the competence of the supplier/vendor. It was further contended that the Clause 5[d] is consequential as the certifying authority is the Executive Engineer or equivalent officer of the concerned Electrical utilities and only those who have supplied minimum 25% of the tendered quantity would be able to secure the completion certificate and all other players in the private market would be eschewed from the process of participation which is discriminatory and arbitrary. It was argued that the objective of tender process is not only to adhere to a transparent mechanism but to encourage the competition equally to all the players in the market resulting in getting a fair offer. Learned counsel placed reliance on the judgment of the Hon'ble Apex Court in the case of National Highways Authority of India v. Gwalior-Jhansi Expressway Limited reported in [2018] 8 SCC 243 in support of his contention.

7. Learned Senior Counsel Sri. S. Naganand, appearing for the respondent Nos.1 and 2 argued that the procurement of RCC and PSCC poles is essential for the various works carried out by the respondent No.1 without any delay. The said qualifying requirement is prescribed under Clauses 5(b), (c) and (d) in the tender document to ensure that the technically and financially sound bidders will supply the poles in order to ensure quality and timely supply of poles and not to eliminate bidders from participating in the tender process as alleged by the petitioners. The said Clauses are included in the tender document only in the interest of respondent No.1-Company and also in the public interest. Stipulating the eligibility criteria in tender document is the sole prerogative of the authority inviting bids and courts are, by their very nature, not competent to go into such technical and commercial aspects. It was argued that it is an admitted fact that the petitioners are not eligible to bid under the qualifying requirement stipulated in the tender notification, interest of the petitioners would not prevail over the public interest. Learned Senior counsel further argued that the Clauses of the tender document impugned herein are neither arbitrary nor discriminatory and is not hit by Article 14 of the Constitution. The learned Senior Counsel submits that the scope for judicial review is restricted and limited in the matter of prescribing the terms and conditions of the tender notifications. Learned Senior Counsel placed reliance on host of cases including:-

1. Michigan Rubber (India) Limited v. State of Karnataka and others reported in (2012) 8 SCC 216; and

2. M/s. Sree Datta Sai Cement Concrete Products v. The State of Karnataka and others in W.A.No.1208/2015 and W.A.Nos.1221-1222/2015 disposed of on 03.06.2015.

8. Learned Additional Government Advocate appearing for respondent No.1 in W.P.No.55407/2018 submitted that Article 14 of the Constitution of India is not attracted in the present set of facts. It was argued that the tender terms are contractual and it is the privilege of the Authority which invites its tenders to fix the qualification clauses and the Courts have no jurisdiction to adjudicate as to the terms and conditions of the tender framed. Learned counsel placed reliance on the judgment in the case of Puravankara Projects Limited v. Hotel Venus International & others reported in 2007(1) SCC page 33.

9. I have carefully considered the rival submissions of the learned counsel appearing for the parties and perused the material on record.

10. The pre-qualification criteria as specified in Clause 5[c] and [d] of the tender notification reads as under:

"c]. The bidder should have obtained orders for supply of minimum of 25% of the tendered quantity of RCC/PSC/PCC poles during preceding 3 years all put together [2015-16, 2016-17 & 2017-18] and these supplies should have been to BESCOM/KPTCL/ESCOMs/other states owned DISCOMs/Electricity Boards in India including PSUs. Purchase order copies placed by BESCOM/KPTCL/ESCOMs/other states owned DISCOMs Electricity Boards in India including PSUs shall be uploaded.

d]. The bidder shall furnish order completion certificate issued by the officer not below the rank of executive engineer or equivalent officer of the concerned electrical utilities, for having supplied minimum of 25% of the tendered quantity of RCC/PSC/PCC poles during preceding 3 years all put together [2015-16, 2016-17 & 2017-18] and these supplies should have been to BESCOM/KPTCL/ESCOMs/other states owned DISCOMs/Electricity Boards in India including PSUs. Purchase order copies placed by BESCOM/KPTCL/ESCOMs/other states owned DISCOMs Electricity Boards in India including PSUs shall be uploaded.

11. The core question would be Whether the impugned qualifying requirement prescribed in Clause 5[c] and [d] of the tender notification is arbitrary or discriminatory and calls for interference by this Court?

12. The Hon'ble Apex Court in the case of Michigan Rubber (India) Limited v. State of Karnataka & others reported in (2012)8 SCC page 216 has laid down the principles in as much as the judicial review of the tender conditions and the same reads thus:

"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 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."

13. It is further observed that a Court before interfering in tender or contractual matters, in exercise of power of judicial review, should pose to itself the following questions:

(i) "Whether the process adopted or decision made by the authority is mala fide or intended to favour someone; or whether the process adopted or decision made is so arbitrary and irrational that the court can say: "the decision is such that no responsible authority acting reasonably and in accordance with relevant law could have reached"? and

(ii) Whether the public interest is affected?

If the answers to the above questions are in the negative, then there should be no interference under Article 226."

14. The pre qualification criteria specified in Condition No.2 of the tender dated 5.7.2007 impugned therein reads as under:

"2 Pre-qualification criteria for procurement of TTF Sets: (a) Only the tyre manufacturers who have supplied a minimum average of 5000 sets of Tyres, Tubes and Flaps set per annum, in the preceding three years out of 2003-04, 2004-05, 2005-06 and 2006- 07 to any one of the OE chassis manufacturer, i.e. Ashok Leyland, Tata Motors, Eicher, Swaraj Mazda and Volvo are eligible to participate, for supply of respective size/type of Tyres, Tubes and Flaps set. They should produce purchase order copies and invoice supplies in support of the same.

(b) The firm should have minimum average annual turnover of Rs. 500 crores in the preceding three years out of 2003-04, 2004-05, 2005-06 and 2006-07 from the sale of tyres, Tubes and Flaps."

[Emphasis supplied]

15. After filing of the writ petition challenging the said pre qualification criteria by the appellant Company Michigan Rubber (India) Limited, before opening the tender bids, KSRTC amended the tender conditions as were incorporated in the earlier document replacing conditions 2(a) and 2(b) with Conditions 4(a) and 4(b) and the same reads thus:

"4. Pre-qualification criteria for procurement of TTF sets: a) Only the tyre manufacturers who have supplied a minimum average of 5000 sets of Tyres, Tubes and Flaps set per annum, in the preceding three years out of 2003-04, 2004-05, 2005-06 and 2006-07 to any of the heavy goods /passenger vehicles/chassis manufacturers in the country are eligible to participate. They should produce purchase order copies and invoice supplies in support of the same.

b) The firm should have minimum average annual turnover of Rs. 500 crores in the preceding three years out of 2003-04, 2004-05, 2005-06 and 2006-07 from the sale of tyres, tubes and flaps."

[Emphasis supplied]

16. It was alleged therein, that the pre qualification criteria specified in the said clauses of the tender document were unreasonable, arbitrary, indiscriminatory and opposed to public interest in general; the said conditions were incorporated to exclude the appellant Company and other similarly placed companies; The tender process on extraneous grounds is unsustainable in law.

17. The following conclusion of the Hon'ble Apex Court is relevant:

"35) As observed earlier, the Court would not normally interfere with the policy decision and in matters challenging the award of contract by the State or public authorities. In view of the above, the appellant has failed to establish that the same was contrary to public interest and beyond the pale of discrimination or unreasonable. We are satisfied that to have the best of the equipment for the vehicles, which ply on road carrying passengers, the 2nd respondent thought it fit that the criteria for applying for tender for procuring tyres should be at a high standard and thought it fit that only those manufacturers who satisfy the eligibility criteria should be permitted to participate in the tender. As noted in various decisions, the Government and their undertakings must have a free hand in setting terms of the tender and only if it is arbitrary, discriminatory, mala fide or actuated by bias, the Courts would interfere. The Courts cannot interfere with the terms of the tender prescribed by the Government because it feels that some other terms in the tender would have been fair, wiser or logical. In the case on hand, we have already noted that taking into account various aspects including the safety of the passengers and public interest, the CMG consisting of experienced persons, revised the tender conditions. We are satisfied that the said Committee had discussed the subject in detail and for specifying these two conditions regarding pre-qualification criteria and the evaluation criteria. On perusal of all the materials, we are satisfied that the impugned conditions do not, in any way, could be classified as arbitrary, discriminatory or mala fide."

18. In order to examine the pre qualification impugned whether is hit by Article 14 of the Constitution, it is apt to refer to the relevant passage in the case of Dharam Dutt and Others v. Union of India and Others reported in [2004] 1 SCC 712, the same is quoted hereunder:

"56. Article 14 of the Constitution prohibits class legislation and not reasonable classification for the purpose of legislation. The requirements of the validity of legislation by reference to Article 14 of the Constitution are: that the subject matter of legislation should be a well-defined class founded on an intelligible differentia which distinguishes that subject-matter from the others left out, and such differentia must have a rational relation with the object sought to be achieved by the legislation. The laying down of intelligible differentia does not, however, mean that the legislative classification should be scientifically perfect or logically complete."

19. It is thus clear that two factors have to be fulfilled to uphold the validity of such pre qualification by reference to Article 14 of the Constitution viz., the subject matter classification should be founded on an intelligible differentia which distinguishes that subject matter from the others left out and secondly, such differentia must have a rational relation with the object sought to be achieved.

20. The purpose of including the conditions impugned herein highlighted by the respondents is that RCC/PLCC poles are essential for various works carried out by the respondent No.1, without any delay. Hence, to ensure speedy and efficient supply of poles such clauses are necessary. Further, an intending supplier who has actually supplied to PSUs would instill a high degree of confidence in the procuring entity about their past performance. Supplies, if any, to non-PSUs are not monitored by similar regulatory framework and it would be difficult and hazardous to rely on such alleged supplies.

21. On the contrary, the performance certificate issued by the respondent No.1 indicates the quality and timely work done by the petitioners in supplying RCC/PSCC poles to the contractors who had supplied the same to BESCOM and ESCOMS under Turnkey project.

22. On evaluation of Clause[c], it is discerned that the same consists of two parts namely, [1] The bidder should have obtained orders from supply of minimum of 25% of the tendered quantity of RCC/PSC/PCC poles during preceding 3 years all put together [2015-16, 2016-17 & 2017-18] and [2] These supplies should have been to BESCOM/KPTCL/ESCOMs/other states owned DISCOMs/Electricity Boards in India including PSUs. Purchase order copies placed by BESCOM/KPTCL/ESCOMs/other states owned DISCOMs Electricity Boards in India including PSUs shall be uploaded.

23. Clause [d] is consequential to Clause [c]. It is true that the first part of Clause[c] may be to ascertain the previous experience of the bidders in supplying the goods/poles. This condition cannot be held to be arbitrary or discriminatory since experience is the pre-qualification required to ensure the quality and the timely execution of the contract by the bidders. However, the second part insisting for such supplies to be made only to Government owned entities/PSUs eliminating the private entities forms a division among the players/suppliers engaged in the business of supplying the poles. In order to wriggle out of the discrimination under Article 14 of the Constitution of India, such division has to satisfy the test of intelligible differentia and has to establish nexus with the objective to be achieved. As could be seen, the criteria prescribed to assess the quality and timely execution of works contract of a bidder is not based on any scientific method. No criteria is fixed relating to quality of manufacture and supply but is on the basis of supplies made to certain class of entities. This condition of eliminating private players in the field of production of energy/manufacturer of poles has no rational basis. On the other hand, permits only suppliers who have already entered the pre-qualification arena securing the contracts earlier with the public entities/PSUs and shuts down the entry of other suppliers/players in the filed who possess the similar experience in the manufacture and supply of poles but supplied to the private entities. It is not the scientific evaluation of assessment of quality or timely supply of materials by the bidders. Assessment of suppliers can be made by various modes not merely on the contract supplies made to the public undertaking/companies. The conditions impugned do not suggest maintaining of any confidentiality/security in the larger interest of the State/Country.

24. Performance certificate issued by the respondent No.1 demonstrates the supplies made to the private entities by the petitioner who in turn have supplied to the public entities/PSUs in a turnkey project. Merely for the reason that the petitioners were sub-contractors and not main contractors in executing the work with public entities/PSUs, it cannot be held that they do not possess the required experience on par with the suppliers who directly executed the works contract with such Government entities/PSUs.

25. At this juncture, it is beneficial to refer to the facts of the case of Michigan Rubber [supra], indeed, the first pre-qualification criteria of tender notification was similar to the pre-qualification now prescribed. It was stipulated that the supply should be made to only certain entities specified therein. However, during the writ proceedings, it was amended substituting the said clause to any of the heavy goods/passenger vehicles, chassis manufacturers in the Country. Considering the broader concept of the supplies to be made in general not in particular to any companies/entities, the Hon'ble Apex Court held that such a condition of selection not conferring any monopoly right by the State on any private individual or concern or tailor-made to promote any parties excluding indigenous manufacturers, could not be classified as arbitrary, discretionary or malafide.

26. This Court is conscious of the principle that classification having regard to microscopic differences is not good more particularly, in tender conditions prescribed, but creating Sub-categories, viz., [1] supplies made to public entities and [2] supplies made to private entities, even when both sub-categories are of same genus having required experience of supply of poles, results in invidious discrimination, it can not be held that Article 14 of the Constitution of India is not applicable.

27. On analysis of the tender pre-qualification impugned, it is clear that the conditions impugned would lead to monopoly of the business in the hands of a few to the exclusion of the other players. No discernable reason is found in structuring the pre-qualification except to eliminate suppliers possessing similar experience. On the touchstone of reasonableness, any such condition [second part of clause[c]] is per se arbitrary. The said impugned condition if permitted to operate, would result in the scenario of monopolization in the hands of few suppliers giving scope for cartelization, ultimately resulting in squeezing the competition of the business, defeating the objective of tender process.

28. In the case of M/s. Datta Sai Cement Concrete Products supra, the pre-qualification of the tender was as under:

"The bidder shall have pole manufacturing unit located within BESCOM jurisdiction."

29. In that context, it was observed in para 16 of the judgment of the learned Single Judge, which reads thus:

"16. The only question falling for my consideration is whether the impugned qualifying requirement is violative of law and/or arbitrary? It is trite that laying the terms and conditions of a tender falls within the domain of the executive or experts. The Courts would not substitute their wisdom for the wisdom of the experts in the field. If the eligibility criteria is prescribed with a view to generate the employment for the local people, encourage the local industries, get more VAT, bring about development in some rural areas, reduce the cost of transportation, the Tender

Inviting Authority cannot be found to be at fault for doing the same."

30. The said judgment has been approved by the Division Bench. Indeed, the object of such a clause was to generate employment to local people and to develop local industries. Hence, the said decision is not applicable to the fact situation at hand.

31. As observed by the Hon'ble Apex Court in the case of National Highways Authority of India supra, the objective of tender process is not only to adhere to a transparent mechanism but to encourage competition and give equal opportunity to all tenderers

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with the end result of getting a fair offer or value for money. 32. In the light of the said judgment, it is not in dispute that more competition results in fair offer and is in the public interest. The conditions impugned certainly benefits a class of tenderers squeezing the sphere of competition, the same suffers from the vice of arbitrariness and is hit by Article 14 of the Constitution of India. 33. Hence, the pre-qualification in Sub-clause [c] of Clause 5 as far as stipulating the condition - These supplies should have been to BESCOM/KPTCL/ESCOMs/other states owned DISCOMs/Electricity Boards in India including PSUs. Purchase order copies placed by BESCOM/KPTCL/ESCOMs/other states owned DISCOMs Electricity Boards in India including PSUs shall be uploaded and the consequential condition in clause 5[d] of the tender notification are liable to be quashed. 34. I.A.No.1/2019 has been filed by the learned counsel for the proposed respondents 3 and 4 who have fulfilled all the eligibility conditions contemplated in the tender documents. 35. It is the contention of the proposed respondents that they are directly affected by the Interim order passed by this Court on 21.12.2018 and the entire tender process would be affected if bidders who do not satisfy the tender conditions and qualifying requirements are permitted to upload the bids and participate in the tender process since no right has been accrued to the said proposed respondents as successful bidders and the challenge made to the tender document is the lis between the petitioners and the original respondents. 36. Hence, in view of the reasons aforesaid for allowing the writ petitions, I.A.No.1/2019 filed by the proposed respondents does not survive for consideration. Moreover, they are not the necessary and proper parties for the effective adjudication of the dispute involved herein. Hence I.A.No.1/2019 deserves to be dismissed. Accordingly, the following: Order 1. Writ petitions are allowed. 2. The clause No.5[c] of the tender notification dated: 23.11.2018 issued by the respondent No.2 is quashed, so far as the supplies should have been to BESCOM / KPTCL / ESCOMs / other states owned DISCOMs / Electricity Boards in India including PSUs and the Purchase order copies placed by BESCOM / KPTCL / ESCOMs / other states owned DISCOMs Electricity Boards in India including PSUs shall be uploaded. 3. The Clause 5[d] of the notification dated: 23.11.2018 issued by the respondent No.2 is also quashed. 4. I.A.No.1/2019 stands dismissed.
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