M/s Ch. Philip Caterers Through Its Proprietor Shri Ch. Philip, Age 49 Years, S/o v. 1 - State Of Chhattisgarh Through The Secretary, Department Of Health And Medical Education
Case Details
1 2025:CGHC:21500-DB NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR WPC No. 2165 of 2025 M/s Ch. Philip Caterers Through Its Proprietor Shri Ch. Philip, Age 49 Years, S/o Late Ch. John, Residence And OfÏce At Behind Tagore School, Sector-1, Shivanad Nagar, Khamtarai, Raipur, District - Raipur (C.G.) ... Petitioner(s) versus 1 - State Of Chhattisgarh Through The Secretary, Department Of Health And Medical Education, Mahanadi Bhawan, Mantralaya, Atal Nagar, Nava Raipur, District - Raipur (C.G.) 2 - Directorate Of Medical Education North Block, Sector-19, Swasthya Bhawan, 2nd Floor, Nava Raipur, Atal Nagar, Raipur, District - Raipur (C.G.) 3 – Dean, Chhattisgarh Institute Of Medical Sciences, Bilaspur (C.G.) 4 - Joint Director And Medical Superintendent Chhattisgarh Institute Of Medical Sciences, Bilaspur (C.G.) ... Respondent(s) For Petitioner(s) : Mr. J.N.Nande, Advocate. For Respondent(s) / State : Mr. Shashank Thakur, Deputy Advocate General Hon'ble Shri Ramesh Sinha, Chief Justice Hon'ble
Legal Reasoning
to contend that the position of law with regard to interpretation of the terms of contract is that the question as to whether a term of contract is essential or not is to be viewed from the perspective of the employer and by the employer. Further, the scope of judicial review in respect of government contract is the exercise of restraint and caution. If two interpretations are possible, then the interpretation of the author must be accepted. The Courts should give way to the opinion of the experts unless the decision is totally arbitrary or unreasonable. 9 Mr. Thakur further submits that conditions of the NIT upon which the petitioner had objection, was revisited by the State and has been amended as aforesaid and as such, the grievance raised by the petitioner stands redressed. However, each and every condition cannot suit all the intending bidders and neither the State is obliged to lay down the conditions as per the wishes of the bidder. 10 Mr. Nande, learned counsel for the petitioner, relying on the counter- afÏdavit filed in response to the afÏdavit filed by the respondent/State, submits that the petitioner was awarded tender for providing dietary services at CIMS for the year 2023-2025 wherein the condition of NIT mentioned as average annual turnover of Rs. 1 Crores for the last three financial years was required for eligible bidders and Quality Based System Annexure-V) wherein evolution criteria fixed for Average Annual Turnover in last 3 years - 1 point for every Rs. 20 lacs above the required turnover- maximum of 5 points whereas in new NIT for the year 2025-27 8 is eligibility criteria for Average Annual Turnover fixed of Rs. 5 Crores during last 3 financial years which is not only excessive but also very harsh condition. Also, the QBS established in the year 2023 Average Annual Turnover in last 3 years, 1 point for every Rs. 20 lacs above the required turnover- maximum of 5 points, which is arbitrarily increased in new NIT as 1 point for every Rs. 5 crores above the required turnover maximum of 3 points which is self contradictory and arbitrary and introduced to excluding the fair competition. In the year 2023 NIT, highest score obtaining bidder has been selected in QBS marks, in case of same score gained in QBS process by the 02 or more bidder then preference will be given on the basis of Quality Certificate and marks issued by the government hospitals in all present works in last 7 years and now, in new NIT of 2025-27, it has been changed and mentioned that if 2 bidder obtained same score then preference will be given on the basis of highest average turnover certificate of last 3 years (FY 2021-22, 22-23, 23-24) issued by the Charted Accountant. In new NIT, terms and condition specified for QBS has not been related with dietary services or quality of the services certified by the Hospital Superintendent and it is based only on annual turnover certified by the Charted Accountant. In new questioned NIT's QBS degraded the quality of the dietary services as in point no. 03 of (Annexure-V of NIT 2025-27) the experience required for the bidder to participate in bidding process has been decreased from 6 hospitals to only 2 hospital whereas in earlier NIT, dietary services provided in last 7 years in govt. hospitals was 6 hospitals mention for QBS 4 points which is now has been decreased to only 2 hospitals maximum 2 points one point for each hospital. In new questioned NIT 2025-27 technical bid documents needed to be submitted by the bidder required to submit an afÏdavit declaring that the 9 bidder have not been penalized within last 3 years whereas this condition has not been imposed or mentioned in the earlier NIT. This type of condition creates a civil death of any eligible bidder and aimed to exclude the eligible bidders from the tender process. Fixing high turnover in new NIT which is only convenient and favorable for some bidders, excludes the competition in the bidding process and shows their wishes to choose a persons who shows his highest turnover in papers certified by the CA, rather than satisfactory work provided in dietary services certified by the Medical Superintendent. The respondents themselves stated that average annual amount of petitioner firm is Rs. 2,76,75,809/- in last 3 Financial Years which shows that the petitioner firm who successfully runs dietary services since 2023 will be ousted from the bidding process. The excessive turnover arbitrarily increased by the respondent authorities without showing any cogent reason only to avoid the fair competition excluding the MSME from participating in bidding process, which needs to be set aside in the interest of justice. Though some of the conditions has been amended by way of corrigendum, but still some unreasonable and unethical conditions like highest turnover and without mentioning in dietary services in QBS, has already been questioned in NIT 2025-27 which is arbitrary and illegal and needs to be set-aside. 11 We have heard learned counsel for the parties, perused the pleadings and documents appended thereto. 12 From perusal of the afÏdavit filed by the State, it is evident that some of the NIT conditions have been changed by way of corrigendum annexed as Annexure D/1 and D/2. The average turnover has been brought down to Rs. 5 Crores instead of Rs. 10 Crores. Similarly, the requirement of 500 employees has also been changed and now points would be 10 awarded for number of employees available. The petitioner is still unsatisfied that the average annual turnover during last three financial year should be according to his financial capacity which cannot be done. The State/respondents have taken into consideration the objections / grievances of the petitioner and whatever they have found to be excessive, has been reduced and modifications/changes have been made accordingly. Each and every condition of the NIT cannot be as per the whims and fancies of the petitioner though he may be in the field of dietary services for long time. The State has acted fairly and made requisite amendments which appeared to be on a higher side. However, it is not within the domain of this Court to direct the State to incorporate the conditions as per the convenience of the bidders. 13 Recently, the Apex Court, in the matter of Banshidhar Construction Pvt. Ltd. v. Bharat Coking Coal Ltd. & Others, {Civil Appeal No. 11005 OF 2024, decided on 04.10.2024}, taking note of the decisions rendered in various other celebrated judgments, observed as under: “21. There cannot be any disagreement to the legal proposition propounded in catena of decisions of this Court relied upon by the learned counsels for the Respondents to the effect that the Court does not sit as a Court of Appeal in the matter of award of contracts and it merely reviews the manner in which the decision was made; and that the Government and its instrumentalities must have a freedom of entering into the contracts. However, it is equally well settled that the decision of the government/ its instrumentalities must be free from arbitrariness and must not be affected by any bias or actuated by malafides. Government bodies being public authorities are expected to uphold fairness, equality and public interest even while dealing with contractual matters. Right to equality under Article 14 abhors arbitrariness. Public authorities have to ensure that no bias, favouritism or arbitrariness are shown during the bidding process and that the entire bidding process is carried out in absolutely transparent manner. 11 22. At this juncture, we may reiterate the well-established tenets of law pertaining to the scope of judicial intervention in Government Contracts. 23. In Sterling Computers Limited vs. M/s. M & N Publications Limited and Others1, this Court while dealing with the scope of judicial review of award of contracts held: - “18. While exercising the power of judicial review, in respect of contracts entered into on behalf of the State, the Court is concerned primarily as to whether there has been any infirmity in the “decision making process”. In this connection reference may be made to the case of Chief Constable of the North Wales Police v. Evans [(1982) 3 All ER 141] where it was said that: (p. 144a) “The purpose of judicial review is to ensure that the individual receives fair treatment, and not to ensure that the authority, after according fair treatment, reaches on a matter which it is authorised or enjoined by law to decide for itself a conclusion which is correct in the eyes of the court.” By way of judicial review the court cannot examine the details of the terms of the contract which have been entered into by the public bodies or the State. Courts have inherent limitations on the scope of any such enquiry. But at the same time as was said by the House of Lords in the aforesaid case, Chief Constable of the North Wales Police v. Evans [(1982) 3 All ER 141] the courts can certainly examine whether “decision-making process” was reasonable, rational, not arbitrary and violative of Article 14 of the Constitution.” 24. In Tata Cellular vs. Union of India2, this Court had laid down certain principles for the judicial review of administrative action. “94. The principles deducible from the above are: (1) The modern trend points to judicial restraint in administrative action. (2) The court does not sit as a court of appeal but merely reviews the manner in which the decision was made. (3) The court does not have the expertise to correct the administrative decision. If a review of the administrative decision is permitted it will be substituting its own decision, without the necessary expertise which itself may be fallible. 1 2 (1993) 1 SCC 445 (1994) 6 SCC 651 12 (4) The terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to tender is in the realm of contract. Normally speaking, the decision to accept the tender or award the contract is reached by process of negotiations through several tiers. More often than not, such decisions are made qualitatively by experts. (5) The Government must have freedom of contract. In other words, a fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasi-administrative sphere. However, the decision must not only be tested by the application of Wednesbury principle of reasonableness (including its other facts pointed out above) but must be free from arbitrariness not affected by bias or actuated by mala fides. (6) Quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure. Based on these principles we will examine the facts of this case since they commend to us as the correct principles.” 25. It has also been held in ABL International Limited and Another vs. Export Credit Guarantee Corporation of India Limited and Others3, as under: - “53. From the above, it is clear that when an instrumentality of the State acts contrary to public good and public interest, unfairly, unjustly and unreasonably, in its contractual, constitutional or statutory obligations, it really acts contrary to the constitutional guarantee found in Article 14 of the Constitution.” 26. In Jagdish Mandal vs. State of Orissa and Others4, this Court after discussing number of judgments laid down two tests to determine the extent of judicial interference in tender matters. They are: - “22. (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 blacklisting or imposition of 3 4 (2004) 3 SCC 553 (2007) 14 SCC 517 13 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.” 27. In Mihan India Ltd. vs. GMR Airports Ltd. and Others5, while observing that the government contracts granted by the government bodies must uphold fairness, equality and rule of law while dealing with the contractual matters, it was observed in Para 50 as under: - “50. In view of the above, it is apparent that in government contracts, if granted by the government bodies, it is expected to uphold fairness, equality and rule of law while dealing with contractual matters. Right to equality under Article 14 of the Constitution of India abhors arbitrariness. The transparent bidding process is favoured by the Court to ensure that constitutional requirements are satisfied. It is said that the constitutional guarantee as provided under Article 14 of the Constitution of India demands the State to act in a fair and reasonable manner unless public interest demands otherwise. It is expedient that the degree of compromise of any private legitimate interest must correspond proportionately to the public interest.” 28. It was sought to be submitted by the learned Counsels for the Respondents relying upon the observations made in Central Coalfields Limited and Another vs. SLL-SML (Joint Venture Consortium) and Others6, that whether a term of NIT is essential or not is a decision taken by the employer which should be respected. However, in the said judgment also it is observed that if the employer has exercised the inherent authority to deviate from the essential term, such deviation has to be made applicable to all the bidders and potential bidders. It was observed in Para 47 and 48 as under:- “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 alsofrom the point of view of the employer. As held in Ramana Dayaram Shetty [Ramana Dayaram Shetty v. International Airport Authority of India, (1979) 3 SCC 489] the terms of 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 [Tata Cellular v. Union of India, (1994) 6 SCC 651] there must be judicial restraint in interfering 5 6 (2022) SCC OnLine SC 574 (2016) 8 SCC 622 14 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 mala fide 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 [Jagdish Mandal v. State of Orissa, (2007) 14 SCC 517] followed in Michigan Rubber [Michigan Rubber (India) Ltd. v. State of Karnataka, (2012) 8 SCC 216]. 48. Therefore, whether a term of 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 [Ramana Dayaram Shetty v.International Airport Authority of India, (1979) 3 SCC 489] . However, if the term is held by the employer to be ancillary or subsidiary, even thatdecision 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.” As the petitioner has already deposited a sum of Rs. 5 Lacs towards the EMD as required, he may participate in the tender process, if so desired. 14 15
Arguments
Shri Arvind Kumar Verma , Judge 2 Judgment on Board Per Ramesh Sinha, Chief Justice 08 /0 5 /2025 1 Heard Mr. J.N.Nande, learned counsel for the petitioner as well as Mr. Shashank Thakur, learned Deputy Advocate General for the State/ respondents. 2 By this petition under Article 226 of the Constitution of India, the petitioner has prayed for the following relief(s): “10.1 That, the Hon'ble Court may kindly be pleased to allow the instant writ petition and issue appropriate writ of mandamus and set-aside/quashing the Notice Inviting Tender GEM/2025/ B/6129623 Dated 10/04/2025 issued by Respondent No. 04, in the furtherance of justice. 10.2 That, the Hon'ble Court may kindly be pleased to issue appropriate writ and directed the Respondent authorities to issue dietary services tender as per the work experience in dietary services of the Bidders and also turnover and deployed number of employees related in the dietary services. 10.3 Any other relief/relief's which this Hon'ble Court may deem fit and proper in the facts and circumstances of the case may kindly be please granted to the Petitioner, in the interest of justice. 3 The facts, as projected by the petitioner is that the petitioner Firm is a well-established and experienced contractor engaged in the business of dietary and catering services since the year 2005. It has an extensive 3 track record of providing dietary services in major government hospitals within the State of Chhattisgarh. It has been continuously providing dietary services at Chhattisgarh Institute of Medical Sciences (CIMS), Bilaspur since 2017 to till date. At present the firm is engaged in rendering dietary services in 6 Medical Colleges, 2 District Hospitals and 1 Central Railway Hospital in the State of Chhattisgarh. 4 The Respondent No. 03, Dean of CIMS, Bilaspur issued a Notice Inviting Tender bearing No. 725 dated 17/01/2023 (for short, the NIT) for the provision of dietary services in CIMS Bilaspur. The Petitioner Firm, being fully qualified and experienced in the dietary service field, submitted its proposal in accordance with the terms and conditions stipulated in the NIT dated 17/01/2023. Upon evaluation, the petitioner's bid was found to be the most suitable, and the competent authority accepted the bid of the petitioner Firm, leading to the issuance of a work allotment order on 16/03/2023 by respondent No. 3. Through this work order dated 16/03/2023, the petitioner Firm was awarded the work contract for dietary services at CIMS Hospital Bilaspur for duration of 2 years with extendable duration of 1 year upon the satisfaction of work. On 16/03/2023, pursuant to allotment of work, the petitioner Firm entered into the Tender Agreement with CIMS Bilaspur acknowledging and agreeing upon each and every terms and conditions made in Clauses of the Agreement. The petitioner Firm, in compliance with the contractual obligations, commenced its services and has been diligently fulfilling its duties as per the terms of the contract. It was specifically mentioned in the NIT as well as in Clause 15 of the Tender Agreement dated 16/03/2023, the duration of the Rate Contract was stipulated for a period of two years, extendable by a further period of one year, contingent upon the satisfactory performance of the contractor/bidder. 5 Mr. Nande submits that the respondent authorities themselves issued an 4 order on 25/10/2023 and directed Food and Drugs Administration Department to examine the dietary services and upon instruction conducted an Audit Report on to examine the Control and Operation of the Dietary Services of the petitioner Firm in CIMS Bilaspur and in this regard the Food Security OfÏcer of the Food & Drug Administration Department Raipur evaluated and provided its report giving total 98 points out of 108 points i.e. 91% which is "A" Grade indicating "Satisfactory work" of the petitioner Firm. Despite the petitioner Firm's impeccable track record with utmost satisfactory performance in dietary services and adherence to contractual obligations, the respondent No. 04, acting arbitrarily and issued a letter dated 07/03/2025 whereby only three months extension has been provided and unilaterally curtailed the one year extendable period, contravention of the explicit terms of the Notice Inviting Tender (NIT) No. 725 dated 17/01/2023 and the Tender Agreement dated 16/03/2023. Meanwhile on 10/04/2025 the respondent authorities floated new Notice Inviting Tender in portal GEM/2025/B/6129623 for supply of dietary and its related services at CIMS, Bilaspur, wherein without any cogent reason, unethical conditions have been proposed and imposing unfair and unreasonable conditions which is totally against the fair competition and government policies of MSME Guidelines. The turnover and total number of employees deployed by the firm instead of their actual requirement are increased in new NIT Tender dated 10/04/2025 which is contravention of the explicit terms of the earlier Notice Inviting Tender (NIT) No. 725 dated 17/01/2023, therefore the impugned NIT Tender dated 10/04/2025 is unreasonable, unjust, issued without application of mind, and is in direct contravention of the fundamental rights guaranteed under the 5 Constitution of India. On 18/10/2023 and 11/03/2025 the respondent No. 04 issued the Work Experience Certificate in favour of the petitioner Firm wherein it has been specifically mentioned that the execution of work under the duration of work contract by the petitioner Firm is Good and upto utmost Satisfaction of the Hospital standard. On 16/04/2025 the petitioner firm submitted its objection and drew some crucial points before the Respondent authorities and informed thern the condition of Tender dated 10/04/2025 are very unethical, unfair and not based on legal grounds The New NIT has increase the cost of the dietary services and without any cogent reason turnover of the firm has sharp increase whereby exclude the MSME entrepreneur which is totally against the fair competition and government policies of MSME Guidelines. The respondent authorities acted in an arbitrary and discriminatory manner without giving any cogent reason unreasonable conditions have been leveled and increase the turnover and other subsidiary conditions by issuing New Tender on 10/04/2025 in violation of the principles of natural justice and the settled law relating to work contracts. They have failed to assign any cogent reason for imposing/leveling the illogical, unfair and irrational conditions in New NIT dated 10/04/2025. The impugned new NIT dated 10/04/2025 is unreasonable, unjust, malafide, issued without application of mind, and is in direct contravention of the fundamental rights guaranteed under the Constitution of India and henceforth the impugned New NIT dated 10/04/2025 deserves to be set aside in the interest of justice. 6 Mr. Nande submits that in similar circumstances, the Bombay High Court, in M/s. Watergrace Products v. Naashik Municipal Corporation & Others, {WP No. 701/2025, decided on 20.02.2025} had struck down some of the tender conditions which were arbitrary and 6 irrational and granted liberty to the respondents therein to reframe the conditions of the NIT and then to proceed. He further places reliance on the decision of the Delhi High Court in MI2C Security Facilities Pvt. Ltd. v. North Delhi Municipal Corporation & Others {2021 SCC OnLine Del 3682}, a decision of the Supreme Court in M/s. Kulja Industries Ltd. v. Chief Gen. Manager W.T.Proj. BSNL & Others {(2014) 14 SCC 731} and Techno Prints v. Chhattisgarh Textbook Corporation & Another {(2025) SCC OnLine 343}. 7 On the last date of hearing i.e. on 05.05.2025, learned Deputy Advocate General appearing for the State/respondents had submitted that two corrigendum dated 30.04.2025 were issued by which certain conditions of the tender had been modified and he had prayed for some time to file an afÏdavit in this regard. Pursuant to the same, an afÏdavit was filed yesterday i.e. on 07.05.2025 wherein it has been stated that corrigendum No.1 has been published in 30.04.2025, wherein penalty, liability undertaking (Annexure P/VI) has been made a part of technical bid. Secondly, the penalty of late serving for more than 30 minutes from Rs. 50 per serve has been enhanced to Rs. 1000 per serve. Similarly one more corrigendum (i.e. corrigendum No. 2) and explanation has been issued on 02.05.2025 and according to which the point No.9 of the Technical bid section has been amended and the average annual turnover during the last three financial years has been brought to the tune of Rs. 5 Crores instead of Rs. 10 Crores as provided in the original document. By this amendment it has been made clear that a firm which is having an average annual turnover of 5 Crores during the last three financial years, is eligible to participate. Secondly, in Annexure 5 of quality based system [QBS] entry in serial no. 4 has been amended up to 100 number of employees, 4 points are to be awarded and from 101 to 200, 8 points and above 200 employee, 12 points are to be awarded. 7 8 Mr. Thakur places reliance on the decisions of the Supreme Court in Slippi Constructions Contractors v. Union of India {(2020) 16 SCC 489} and N.G.Projects Ltd. v. Vinod Kumar Jain {(2022) 6 SCC 127}
Decision
In view of the above discussion, no further interference is warranted at this stage and this petition stands disposed of. Sd/- Sd/- (Arvind Kumar Verma) (Ramesh Sinha) JUDGE CHIEF JUSTICE Amit AMIT KUMAR DUBEY Digitally signed by AMIT KUMAR DUBEY Date: 2025.05.10 11:00:30 +0530