The High Court
Case Details
IN THE HIGH COURT OF JHARKHAND AT RANCHI W.P. (C) No. 3223 of 2024 ---- Attal Plastic through its Authorised Signatory, Govind Kumar, aged 35 years, son of Pavan Kumar, C/o Pavan Kumar, 16-11-405/113/S2 2nd Floor, SBI Officer’s Colony, Beside Venkateshwara Balaji Temple, Moosarambagh, VTC Malakpet P.O. Malakpet Colony, P.S. Malakpet Colony, Sub District-Amberpet, District-Hyderabad, State Telangana, PIN 500036. … … Petitioner The State of Jharkhand Versus Secretary, School Education And Literacy Department, 1. 2. having office at JSCA Stadium Road, Jagannathpur, Sector – III, P.O. and P.S. Dhurwa, District-Ranchi. 3. Jharkhand Education Project Council through its Project Director having registered office at JSCA Stadium Road, Jagannathpur, Sector –III, P.O. and P.S. Dhurwa, District-Ranchi. … … Respondents ------- CORAM: HON’BLE THE ACTING CHIEF JUSTICE HON’BLE MR. JUSTICE ARUN KUMAR RAI For the Petitioner For the Res-State For the Res-JEPC ------ : Mr. Nilesh Kumar, Advocate Mr. Amit Kumar Sinha, Advocate : Mr. J.F. Tolppo, G.A V Mrs. Moushmi Chatterjee, AC to GA V : Mr. Krishna Murari, Advocate Mr. Jayesh Anand, Advocate Mr. Raj Vardhan, Advocate Order No. 02 : Dated 23rd July, 2024 Per Sujit Narayan Prasad, J: -------- 1. The instant writ petition, under Article 226 of the Constitution of India, has been filed challenging the condition as stipulated in the e-tender particularly Section VI (a) and VI - 1 - (g) on the ground that such condition has been stipulated
Decision
only to deprive the eligibility of the writ petitioner. 2. The facts of the case, leading of filing of the instant writ petition which requires to be enumerated, read as under: 3. The respondent-Jharkhand Education Project Council (JEPC) floated a tender on 08.05.2024 for supply of school bags for children studying in Government Schools in Class I to VII for 2024-25 in the State of Jharkhand. It is the case of the petitioner that the petitioner, being an avid manufacturer of school bags, was desirous to participate in the tender process but was debarred from even participating in the tender process despite his past experience in the said area in the garb of condition as incorporated under Section VI (a) and VI (g) of the bid documents. Aggrieved thereof, the petitioner has approached this Court by filing the instant writ petition. 4. Learned counsel for the petitioner has submitted by referring Section VI (a) and VI (g) of the bid documents that in the bid document specific condition has been inserted stipulating therein that any company incorporated in India, registered Indian Partnership Firm (including liability partnership), limited liability partnership and/or Company may participate in the bid. The bidders should be a manufacturer of School bags. Further, the bidders shall have - 2 - minimum average annual initial turnover of Rs. 80 crores during the last five financial years i.e., 2018-19 to 2022-23. 5. The aforesaid two clauses have been questioned on the ground that the same has been inserted only to exclude the participation of the present petitioner as such the same is highly arbitrary and illegal. 6. Mr. Krishna Murari, learned counsel for the respondents-JEPC has vehemently argued in opposition and submitted that such condition is stipulated in the bid document in order to see the viability of the one or the other bidder, who are intending to participate in the bid so that the quality and standard of the nature of the goods, herein the school bags, is to be assessed. 7. Further ground has been taken that so far as insertion of the conditions in the bid document is concerned that is within the exclusive domain of the authorities concerned and merely because one or other bidders are not fulfilling the eligibility criteria the same cannot be changed and cannot be said to be hit by Article 14 of the Constitution of India. 8. Further argument has been advanced that during pendency of the writ petition, the bid has been finalized and even the work order has been issued in favour of successful bidder. - 3 - 9. This Court has heard learned counsel for the petitioner and gone across the pleadings made in the writ petition as also the relevant conditions as stipulated in the bid. 10. The issue, which has been raised by the present writ petition, is the conditions stipulated under Section VI (a) and VI (g) of the bid documents under the caption ‘Eligibility Criteria’, which are quoted as under: “Section VI: Eligibility Criteria The prospective bidders shall have to meet the following eligibility criteria: (a).Any company incorporated in India, registered Indian Partnership firm (including limited liability partnership), limited liability partnership and/or companies may participate in the bid. The bidder should be a manufacturer of school bags; (g).A bidder shall have a minimum annual average turnover of Rs. 80 crores during last 5 (five) financial years (i.e., 2018- 19 to 2022-23).” 11. Herein, the issue since is of the illegality as alleged to be committed by the authorities in inserting the condition in the bid document, hence there is no dispute with regard to fact of the present case, as such this Court has heard learned counsel for the parties at this stage itself on the legal issue only. 12. The law is well settled, regarding the scope of judicial review in the matter of interference with the condition of the tender. - 4 - 13. The Hon’ble Apex Court in the judgment rendered in the case of Tata Cellular Vs. Union of India reported in (1994) 6 SCC 651 has been pleased to hold that the scope of judicial review can be exercised in such a matter in a case where there is lack of reasonableness is administrative law which means to distinguish between proper use of power so as to eliminate the possibility of arbitrariness. Such power is to be exercised to find out the right balance between the administrative discretion to decide matters whether contractual or political in nature or include a policy is contrary to the statutory provision. In such circumstances, the duty of the Court is to confine itself the question of legality and its concern should be: (i).Whether the decision-making authority exceeded its powers? (ii).committed an error of law, (iii).committed a breach of rules of natural justice, (iv).reached a decision with no reasonable tribunal could have reached or, (v).abused its power. 14. Further, in the Case of Raunaq International Ltd. Vrs. I.V.R. Construction Ltd. & Ors. [(1999)1 SCC 492], the Hon’ble Apex Court while dealing with the issue of scope of judicial review has laid down by holding therein that the - 5 - decision-making process suffers from bias of arbitrariness the same will be scrutinized under the power of judicial review. 15. In the case of Jagdish Mandal Vrs. State of Orissa & Ors. [(2007) 14 SCC 517], it has been laid down by the Hon’ble Apex Court that the power of judicial review in the contractual matters is permissible only if (I) the process adopted or decision made is mala fide or intended to favour someone or the same is so arbitrary and irrational that the court can say: ‘the decision is such that no responsible authority acting reasonably and in accordance with law could have reached.’ (II) public interest is affected. 16. It is further settled connotation of law that the decisions for the terms of the invitation to tender are not open to judicial scrutiny the same being in the realm of contract, the Government must have a free hand in setting the terms of the tender. 17. Reference in this regard may be taken from the judgment rendered by the Hon’ble Apex Court in the case of Directorate of Education & Ors. Vrs. Educomp Datamatics Ltd. & Ors. reported in (2004) 4 SCC 19, wherein it has been observed at paragraphs 11 and 12 as under: 11. This principle was again restated by this Court in Monarch Infrastructure (P) Ltd. v. Commr., Ulhasnagar Municipal Corpn. [(2000) 5 SCC 287] It was held that the - 6 - terms and conditions in the tender are prescribed by the Government bearing in mind the nature of contract and in such matters the authority calling for the tender is the best judge to prescribe the terms and conditions of the tender. It is not for the courts to say whether the conditions prescribed in the tender under consideration were better than the ones prescribed in the earlier tender invitations. 12. It has clearly been held in these decisions that the terms of the invitation to tender are not open to judicial scrutiny, the same being in the realm of contract. That the Government must have a free hand in setting the terms of the tender. It must have reasonable play in its joints as a necessary concomitant for an administrative body in an administrative sphere. The courts would interfere with the administrative policy decision only if it is arbitrary, discriminatory, mala fide or actuated by bias. It is entitled to pragmatic adjustments which may be called for by the particular circumstances. The courts cannot strike down 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. The courts can interfere only if the policy decision is arbitrary, discriminatory or mala fide. 18. After going through the judgment as referred hereinabove it is evident that interference by the Court exercising the power under Article 226 of the Constitution of India is only if the decision-making process of the authority suffers from propriety by hitting the principle laid down under Article 14 of the Constitution of India. 19. Recently, the Hon’ble Apex Court has rendered the judgment in the case of N.G. Projects Ltd. v. Vinod Kumar Jain & Ors. [(2022) 6 SCC 127] wherein the restrictive order - 7 - has been passed restraining the High Court not to pass ad interim order in the contractual matter, Courts should be even more reluctant in interfering with contracts involving technical issues as there is a requirement of the necessary expertise to adjudicate upon such issues. For ready reference the relevant paragraph of the aforesaid judgment is being quoted as under: 23. In view of the above judgments of this Court, the writ court should refrain itself from imposing its decision over the decision of the employer as to whether or not to accept the bid of a tenderer. The Court does not have the expertise to examine the terms and conditions of the present day economic activities of the State and this limitation should be kept in view. Courts should be even more reluctant in interfering with contracts involving technical issues as there is a requirement of the necessary expertise to adjudicate upon such issues. The approach of the Court should be not to find fault with magnifying glass in its hands, rather the Court should examine as to whether the decision-making process is after complying with the procedure contemplated by the tender conditions. If the Court finds that there is total arbitrariness or that the tender has been granted in a mala fide manner, still the Court should refrain from interfering in the grant of tender but instead relegate the parties to seek damages for the wrongful exclusion rather than to injunct the execution of the contract. The injunction or interference in the tender leads to additional costs on the State and is also against public interest. Therefore, the State and its citizens suffer twice, firstly by paying escalation costs and secondly, by being deprived of the infrastructure for which the present day Governments are expected to work. - 8 - 20. This Court based upon the aforesaid settled propositions of law and adverting to the factual aspect of the present case wherein the condition stipulated in the tender/bid particular Section VI (a) and VI (g), as quoted and referred hereinabove, wherein it has been stipulated that any company incorporated in India, registered Indian Partnership Firm (including liability partnership), limited liability partnership and/or Company may participate in the bid. The bidders should be a manufacturer of School bags. Further, as per condition under Section VI (g), the bidders shall have minimum average annual initial turnover of Rs. 80 during the last five financial years i.e., 2018-19 to 2022-23. 21. Learned counsel for the petitioner at the time of argument has submitted that due to insertion of two clauses the petitioner has been deprived from participation in the bid process and that is the reason, the writ petition has been filed questioning the condition stipulated under Section VI (a) and VI (g) of the bid documents. 22. This Court, taking into consideration the content of stimulation as made under Section VI (a) and VI (g) and discussions made hereinabove, is of the view that merely because bidder has not been in a position to participate in the tender process due to insertion of certain conditions that cannot itself be a ground to interfere with the tender process - 9 - since non-participation on the ground of ineligibility criteria cannot be a ground to hit the Article 14 of the Constitution of India. 23. It is settled principle of law that the bidder/tenderer cannot be permitted to challenge the bid condition/clause which might not suit him and/or convenient to him and the authority floating the tender is the best judge of its requirements and, therefore, the court’s interference should be minimal. 24. Reference in this regard be made to the judgment rendered in the case of Balaji Ventures Pvt. Ltd. Vs. Maharashtra State Power Generation Company Ltd. & Anr. [2022 SCC OnLine SC 1967], wherein at paragraph 9 to 11 it has been held as under: “9. Now so far as the impugned Judgment and order passed by the High Court dismissing the writ petitions is concerned, what was challenged before the High Court was one of the tender conditions/clauses. The High Court has specifically observed and noted the justification for providing clause 1.12(V). The said clause was to be applied to all the tenderers/bidders. It cannot be said that such clause was a tailor made to suit a particular bidder. It was applicable to all. Owner should always have the freedom to provide the eligibility criteria and/or the terms and conditions of the bid unless it is found to be arbitrary, mala fide and/or tailor made. The bidder/tenderer cannot be permitted to challenge the bid condition/clause which might not suit him and/or convenient to him. As per the settled proposition of law as such it is an offer to the prospective bidder/tenderer to compete and submit the - 10 - tender considering the terms and conditions mentioned in the tender document. 10. In the case of Silppi Constructions Contractors v. Union of India, (2020) 16 SCC 489, it is observed in para 20 as under: “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, mala fides or perversity. With this approach in mind we shall deal with the present case.” 11. In the case of Montecarlo Limited v. National Thermal Power Corporation Limited, (2016) 15 SCC 272, it is observed and held that the tender inviting authority is the best person to understand and appreciate its requirement and tender documents, so long as there are no mala fides/arbitrariness etc. It is further observed and held that the Government must have freedom of contract and such action can be tested by applying Wednesbury principle and also examining whether it suffers from arbitrariness or bias or mala fides.” [Emphasis supplied] - 11 - 25. Since, as per the settled position of law and the judgments referred hereinabove, it is the exclusive domain of the authority to insert conditions as per requirement, as such it cannot be said that any error in the decision-making process has been made warranting interference on the ground of hitting Article 14 of the Constitution of India. 26. It is not in dispute that the power of judicial review is to be exercised by the High Court sitting under Article 226 of the Constitution of India but the scope of judicial review is very limited and that can only be exercised if there is arbitrariness or the qualification is unreasonable or after conclusion of the process of bid that there is any error in the process of selection; and equally it is settled that the High Court should not exercise the power in the decision taken by the competent authority in the matter of tender, otherwise it will be said that the High Court has sit as an appellate court over the decision taken by the Committee, which has been made for finalizing the bid. 27. In view of the discussions made hereinabove, this Court is of the view that it is not a case in the nature where the tender or terms or conditions thereof can be said to suffer from vice of arbitrariness or biasness or unreasonableness, hence being a policy decision it is within the domain of the administrative authority, therefore, this Court refrains itself - 12 - from exercising the power of judicial review conferred under Article 226 of the Constitution of India. 28. Moreover, in the present case the bid has been finalized and work order has been issued. Therefore also this Court is of the view that no positive direction can be issued based on the discussions made hereinabove. 29. Accordingly, the instant writ petition stands dismissed. (Sujit Narayan Prasad, A.C.J.) (Arun Kumar Rai, J.) Alankar/ N.A.F.R. - 13 -