E.Gunasekaran v. The Managing Director Pondicherry Co-operative Milk Producers' Union Ltd Kurumampettai Puducherry – 605 009

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED:14.09.2009CORAMTHE HONOURABLE MR. JUSTICE M.M.SUNDRESHW.P. NO.22828 OF 2008E.Gunasekaran .. PetitionerVersusThe Managing DirectorPondicherry Co-operative Milk Producers' Union LtdKurumampettaiPuducherry – 605 009...RespondentPRAYER : Petition filed Under Article 226 of the Constitution ofIndia praying to issue a Writ of Certiorarified Mandamus, to call forthe records for the tender proceedings pursuant to notification dated10.09.2008 on the file of the Pondicherry Co-operative MilkProducers' Union Ltd., Puducherry – 605 609, inviting tenders forengaging vehicle of transport/distribution of milk and milk productsto various centres, quash the same and direct the respondent toinvite tenders including for Insulted Vehicles.For Petitioner: Ms.S.HemalathaFor Respondent: Mr.Swaminathan Special Government Pleader(Puducherry)O R D E RThe petitioner herein has filed the present petitionseeking a writ of Certiorarified Mandamus calling for the records ofthe tender proceedings pursuant to the notification dated 10.09.2008issued by the respondent herein. 2.The case of the petitioner is that the notification hasbeen issued by the respondent on 10.09.2008 calling for tenders forthe distribution of milk through the vehicles. However, in the saidnotification there is no condition to the effect that the insulatedvehicles alone should be used. Therefore, the grievance of thepetitioner is that without including the said condition that theinsulated vehicles alone should be used for carrying milk thenotification is bad in law and therefore, the tender should not beallowed to proceed with. https://hcservices.ecourts.gov.in/hcservices/

3.A counter affidavit has been filed by the respondentstating that the entire writ petition is misconceived in law andfacts. The petitioner and his wife were the successful tenderers forthe earlier period having granted three routes each. However theywere not able to use the routes which have been allotted to themsince they did not have the adequate insulated vehicles. Hence numberof opportunities have been given to the petitioner and his wifefollowed by the show cause notices. Therefore, it is stated in thecounter affidavit that having failed to produce sufficient insulatedvehicles the petitioner cannot file the present writ petition.Moreover the jurisdiction of this Hon'ble High Court to invoke powerunder Article 226 of the Constitution of India is very limited sincethe decision made by the respondent is one of a policy. According tothe learned counsel, the decision has been taken to dispense with theinsulted vehicles in view of the fact that faster vehicles are usedand chilling plants have been constructed thereafter. Therefore, therespondent has thought it fit to remove the said condition since thesame is unnecessary and unwarranted. According to the present system,the supplies are made faster and the said decision has been taken inview of the fact that number of routes have been increased.Therefore, the said decision taken based upon the relevant materialscannot be interfered with under Article 226 of the Constitution ofIndia.4.As rightly contended by the learned counsel for therespondent a decision made by the respondent which is a policy onecannot be interfered unless the same is tainted with mala fides andbased upon irrelevant considerations. When the respondent has taken aconscious policy decision and come to the conclusion, the petitionercannot challenge the same since he is not the person aggrieved. Thepetitioner cannot insist that a particular condition should beincluded in the notification as a tender condition. Moreover as seenfrom the counter affidavit the petitioner himself could not producesufficient vehicles for the earlier period. In the judgment reportedin 2001 (4) CTC 257 [SWAMIDHAS vs. THE CHIEF ENGINEER, NATIONALHIGHWAYS] the Hon'ble Division Bench was pleased to observed asfollows:"3.In contractual matters, the jurisdictionof the High Court under Article 226 of theConstitution of India is very limited. Thelearned counsel for the petitioners cited thejudgment in R.D.Shetty v. International AirportAuthority of India, AIR 1979 S.C. 1628 in supportof their argument that in Governmental contracts,the power under Article 226 of the Constitutioncan be exercised if the action of the authoritiesis arbitrary as such arbitrary action violatesthe Fundamental Right of Equality guaranteed https://hcservices.ecourts.gov.in/hcservices/ under Article 14 of the Indian Constitution.There cannot be any dispute with regard to thesaid legal proposition. In all the latterjudgments of the Apex Court, the said ratiodecidendi has been followed. But the question iswhether imposition of the above condition No.5 isarbitrary. We are conscious of the fact that theappellants are being deprived of their rights tobid even at the threshold as they are denied thetender schedules. Keeping that in mind, weproceed further to test the arbitrariness orotherwise of the above condition No.5.4.Technical report was filed by the secondrespondent pursuant to the requisition by thisCourt and we perused the same. It is stated thatthere are 100 central mixing plants and paversowned by the individuals/companies, and they arecurrently in use through out the State. This isnot denied. By this, it is made out that theimposition of condition is not made to suit onlyone or a few individuals. In so far as thetechnical aspects are concerned, it is statedthat this kind of machinery is being used allover India and that in fact, the State of TamilNadu is a forerunner in using this machinery eversince early 1960's in Madras city roads, and thatthe quality of the said works has been good andlasted long. Indisputedly, the laying of roads byusing central mixing plants and pavers ensureslong term durability and serviceability. It isalso stated that by this process the recurringmaintenance expenditure is minimised therebyreducing the financial burden to the Government.That apart, the technical specification relatingto this user of machinery for laying the superiorquality of roads is followed through out India.This was pursuant to the specifications for roadsand bridge works issued by M.O.S.T. published bythe Indian Roads Congress, which is an apex bodyin so far as standards and specifications forroads and bridges are concerned. In Clause 504 ofthe Technical specification, it has beenstipulated that 'Bituminous macadam shall beprepared in a Hot Mix Plant of adequate capacityand capable of yielding a mix of proper anduniform quality with thoroughly coatedaggregates'. When this was put to the learnedcounsel for the appellant, they fairly agreedthat the machinery which has been specified and https://hcservices.ecourts.gov.in/hcservices/ which is being used, certainly gives a superiorquality of roads. Then, the limitation of thisCourt is narrowed down. Now, the point to beconsidered is as to whether there is any nexusfor imposition of condition of ownership or not.5.Learned counsel for the appellants submitsthat there is no nexus for imposition ofcondition for ownership of machinery even at thethreshold, at the time of furnishing the tenderschedule and that it is suffice if the readinessand willingness of possession of machinery isshown at the time of entering into contract ifthe bid is accepted. Mr.V.Prakash, learnedcounsel, also submits that the length of the roadto be laid is only 3 kms. Costing Rs.3,90,000 andthe cost of setting up the machinery will be morethan the said tender work and that it is not atall feasible and viable for the contractorsowning the machinery to execute the above work.That is not the concern of this Court to examine.Whether the acceptance of work and executionthereof is feasible and viable, is the concern ofthe party who makes a bid. The authoritytendering the work is only concerned about theexecution and the money payable therefor. Inevery contract, there will be clauses for dueexecution of the work and the consequences indefault thereof. The laying of public road isimportant and urgent. Time schedule is threemonths from the date of awarding of contract. Theauthorities cannot and need not wait for thecontractors like appellants to acquire themachinery by way of lease from other owners. Infact, that is a contingent situation. Even aftercontract is struck, there is no guarantee thatmachinery will be provided and if provided, as tothe quality and working condition of themachinery. The public work cannot wait, riskingsuch contingencies. As such, the authoritieshave rightly felt that there should be animposition of ownership of the machinery, as ifsuch machinery is at the ready disposal of suchsuccessful contractor/s they can readily startthe work and successfully complete the samewithin the time schedule. What is more, in viewof numerous such contractors owning machinery, byno stretch of imagination can it be said that theimposition of condition No.5 is a tailor-made tosuit one or a few individuals. In the https://hcservices.ecourts.gov.in/hcservices/ circumstances, we find that the imposition ofcondition No.5 has got a nexus with the object tobe achieved, and that it is neither arbitrary norunreasonable and there is no infringement of anyFundamental Right of the appellants. In thecircumstances, the complaint of the appellantsthat they were unreasonably deprived of supply oftender schedules, cannot be countenanced and thewrit appeals fail and are accordingly dismissed.No costs. Consequently, C.M.P.s are alsodismissed. "5.The Hon'ble Apex Court in the judgment reported 2004 (3)CTC 295 [DIRECTORATE OF EDUCATION v. EDUCOMP DATAMATICS LTD.] hasobserved as follows:"9.It is well settled now that the Courtscan scrutinise the award of the contracts by theGovernment or its agencies in exercise of itspowers of judicial review to preventarbitrariness or favouritism. However, there areinherent limitations in the exercise of the powerof judicial review in such matters. The point asto the extent of judicial review permissible incontractual matters while inviting bids byissuing tenders has been examined in depth bythis Court in Tata Cellular v. Union of India,1994 (6) SCC 651. After examining the entire caselaw the following principles have been deduced."94.The principles deducible from the aboveare:(1)The modern trend points to judicialrestraint in administrative action.(2)The Court does not sit as a Court ofappeal but merely reviews the manner in which thedecision was made.(3)The Court does not have the expertise tocorrect the administrative decision. If a reviewof the administrative decision is permitted itwill be substituting its own decision, withoutthe necessary expertise which itself may befallible.(4)The terms of invitation to tender cannotbe open to judicial scrutiny because theinvitation to tender is in the realm of contract.Normally speaking, the decision to accept the https://hcservices.ecourts.gov.in/hcservices/ tender or award the contract is reached byprocess of negotiations through several tiers.More often than not, such decisions are madequalitatively by experts.(5)The Government must have freedom ofcontract. In other words, a fair play in thejoints is a necessary concomitant for anadministrative Body functioning in anadministrative sphere or quasi-administrativesphere. However, the decision must not only betested by the application of Wednesbury principleof reasonableness (including its other factspointed out above) but must be free fromarbitrariness not affected by bias or actuated bymala fides.(6)Quashing decisions may impose heavyadministrative burden on the administration andlead to increased and unbudgeted expenditure.10.In Air India Limited v. CochinInternational Airport Limited, 2000 (2) SCC 617,this Court observed:"The award of a contract, whether it is by aprivate party or by a public Body or the State,is essentially a commercial transaction. Inarriving at a commercial decision considerationswhich are paramount are commercialconsiderations. The State can choose its ownmethod to arrive at a decision. It can fix itsown terms of invitation to tender and that is notopen to judicial scrutiny. It can enter intonegotiations before finally deciding to acceptone of the offers made to it. Price need notalways be the sole criterion for awarding acontract. It is free to grant any relaxation, forbona fide reasons, if the tender conditionspermit such a relaxation. It may not accept theoffer even though it happens to be the highest orthe lowest. But the State, its corporations,instrumentalities and agencies are bound toadhere to the norms, standards and procedureslaid down by them and cannot depart from themarbitrarily. Though that decision is not amenableto judicial review, the Court can examine thedecision-making process and interfere if it isfound vitated by mala fides, unreasonableness andarbitrariness." https://hcservices.ecourts.gov.in/hcservices/

11.This principle was again re-stated bythis Court in Monarch Infrastructure (P) Ltd. v.Commissioner, Ulhasnagar Municipal Corporationand others, 2000 (5) SCC 287. It was held thatthe terms and conditions in the tender areprescribed by the Government bearing in mind thenature of contract and in such matters theauthority calling for the tender is the bestjudge to prescribe the terms and conditions ofthe tender. It is not for the Courts to saywhether the conditions prescribed in the tenderunder consideration were better than the oneprescribed in the earlier tender invitations.12.It has clearly been held in thesedecisions that the terms of the invitation totender are not open to judicial scrutiny the samebeing in the realm of contract. That theGovernment must have a free hand in setting theterms of the tender. It must have reasonable playin its points as a necessary concomitant for anadministrative body in an administrative sphere.The Courts would interfere with theadministrative policy decision only if it isarbitrary, discriminatory, mala fide or actuatedby bias. It is entitled to pragmatic adjustmentswhich may be called for by the particularcircumstances. The Courts cannot strike down theterms of the tender prescribed by the Governmentbecause it feels that some other terms in thetender would have been fair, wiser or logical.The Courts can interfere only if the policydecision is arbitrary, discriminatory or malafide."6.The said decision of the Hon'ble Apex Court was alsofollowed by a learned single Judge of the Hon'ble High Court reportedin 2005 (4 )CTC 399 [SRI AMMAN ASSOCIATES v. STATE OF TAMIL NADU]wherein the learned single Judge was pleased to hold that the Courtshould not interfere with the terms of the tender notice unless thesame is shown as arbitrary, discriminatory or tainted with malafides. On a perusal of the above said judgment, this Court is of theopinion that the ratio laid down by the judgment referred above issquarely applicable to the present case. The petitioner has no legalright to insist that a particular condition should be incorporatedand the petitioner is also not able to establish any arbitrariness,irregularity or mala fide in a policy decision made by therespondent. https://hcservices.ecourts.gov.in/hcservices/

7.Under those circumstances, the writ petition is liable tobe dismissed. Accordingly, the same is dismissed. No costs.Consequently, connected miscellaneous petitions are closed.Sd/-Asst.Registrar/True Copy/Sub.Asst.RegistrarsriToThe Managing DirectorPondicherry Co-operative Milk Producers' Union LtdKurumampettaiPuducherry – 605 009.+ 1 cc to Mr.L.Swaminathan,Advocate,SR.46721W.P. NO.22828 OF 2008RSY(CO)EM/17.9