Gujarat High Court
International Commerce Ltd. Through ... vs State Of Gujarat on 18 June, 2025
Author: A.S. Supehia
Bench: A.S. Supehia
NEUTRAL CITATION
C/SCA/7380/2025 JUDGMENT DATED: 18/06/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 7380 of 2025
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE A.S. SUPEHIA
and
HONOURABLE MR.JUSTICE R. T. VACHHANI
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Approved for Reporting Yes No
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INTERNATIONAL COMMERCE LTD. THROUGH ITS AUTHORIZED
PERSON NITESH RAJUBHAI MORE
Versus
STATE OF GUJARAT
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Appearance:
MR. HJ KARATHIYA(7012) for the Petitioner(s) No. 1
MS. VAISHNAVI VER,A AGP for the Respondent(s) No. 1
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CORAM:HONOURABLE MR. JUSTICE A.S. SUPEHIA
and
HONOURABLE MR.JUSTICE R. T. VACHHANI
Date : 18/06/2025
ORAL JUDGMENT
(PER : HONOURABLE MR. JUSTICE A.S. SUPEHIA)
1. Rule. Learned AGP waives service of rule on behalf of the respondent State.
2. The present writ petition is filed seeking the following prayers :
18(A) Your Lordships may be pleased to issue a writ of mandamus or a writ in the nature of mandamus or any other appropriate writ, order or directions quashing and setting aside Clause-14 of the tender document, in so far as, it provides for accepting the bid security by way of only Bank guarantee, since said condition is absolutely illegal, arbitrary, illogical and also contrary to the CVC guidelines;
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(B) Your Lordships may be pleased to issue a writ of mandamus or a writ in the nature of mandamus or any other appropriate writ, order or directions direcing the respondent to accept the bid documents of the petitioner-company as per the CVC guidelines and also, as per the representations made by the petitioner-company pursuant to the advertisement dated 24.2.2025 and corrigendum dated 15.4.2025.
(C) In the alternative to prayer (b) issue a writ of mandamus or writ in the nature of mandamus or any appropriate writ, order or direction under Article 226 of the constitution of India directing respondent to cancel the Tender and float a fresh tender in accordance with the CVC guidelines;
3. A bare perusal of the aforementioned prayers reveals that the petitioner has challenged Clause 14 of the Tender Document and has also prayed for setting aside the condition, as mentioned in the Tender Document, for accepting the bid security by way of only Bank Guarantee.
4. Learned advocate Mr. H.J Karathiya appearing for the petitioner, at the outset, has invited the attention of this Court to Clause-14 of the Tender Document and has submitted that the same was contrary to the Mineral (Auction) Rules, 2015 (for short 'the Rules'), more particularly Rule 9(5)(A) (B) thereof. It is submitted that the petitioner purchased the Tender Document after paying an amount of Rs. 2,00,000/- on 25.04.2025. The last date for submission of bid was 02.05.2025. He submitted that the timeline was rescheduled and the last date of sale of Tender Document was fixed as on 25.04.2025 and the last date for submission of bid was fixed on 02.05.2025 and as per the revised schedule, the petitioner-Company purchased the Tender Document on 25.04.2025 after paying the aforesaid amount. It is submitted that the petitioner-Company immediately started finalising the bid document and also initiated the process to obtain the Bank Guarantee for the Bid Security mandated in the Tender Documents. However, since there was holiday i.e on 26.04.2025 and 27.04.2025, the petitioner-Company could not apply for the Bank Guarantee and thereafter on Page 2 of 7 Uploaded by MARY VADAKKAN(HC00204) on Thu Jun 26 2025 Downloaded on : Sat Jun 28 00:51:44 IST 2025 NEUTRAL CITATION C/SCA/7380/2025 JUDGMENT DATED: 18/06/2025 undefined 28.04.2025, when the petitioner applied for the Bank Guarantee, the concerned bank officials had informed the petitioner-Company that the Bank Guarantee requires 4 to 5 working days. It is submitted that under this scenario, he requested the respondent to accept the bid security by way of RTGS/NEFT or Demand Draft however, the same was not permitted. He has pointed out the correspondence, more particularly e-mail sent on 07.05.2025 however, no response has been given. Learned advocate Mr Karathiya has pointed out the CVC guidelines, more particularly paragraph No. 4.11( at page
168) and submitted that the action of the respondent in accepting the bid security in the form of Bank Guarantee is absolutely illegal and contrary to the Rules as well as the guidelines and the same is required to be quashed and set side. In support of his submissions, he has placed reliance on the judgment of the Supreme Court in the case of Haffkine Bio-Pharmaceutical Corporation Ltd. Vs. Nirlac Chemicals 2017 AIR SC 5063. It is also referred in the judgment of the Bombay High Court dated 20.02.2025 passed in Writ Petition No. 701 of 2025 and submitted that Clause 14, which runs contrary to the CVC guidelines and the rules, required to be quashed and set aside.
4.1 Learned advocate Mr. Karathiya has further referred to the provisions of Rule 170 of the General and Financial Rules, 2017 and has submitted that as per the said provisions also, Clause 14, introduced by the respondent in the Tender Document, is quashed and set aside.
5. In response to the aforesaid submission, learned AGP Ms. Verma has vehemently opposed the present writ petition and submitted that in fact the aforementioned Clause 14 of the Tender Document, is appropriate and in line with the Rules, more particularly Rules 9 (5) (A) and (B). It is submitted that it is on the discretion of the respondent as to whether to accept the bid security through Bank Guarantee or through security deposit and in the present case, since the prescribed format already forms the part of the Page 3 of 7 Uploaded by MARY VADAKKAN(HC00204) on Thu Jun 26 2025 Downloaded on : Sat Jun 28 00:51:44 IST 2025 NEUTRAL CITATION C/SCA/7380/2025 JUDGMENT DATED: 18/06/2025 undefined Tender document, the mode and method, as suggested by the petitioner- Company in accepting the bid security, cannot be accepted. With regard to the CVC guidelines, she has submitted that the same would not be applied in case of the petitioner, as the petitioner-Company has to pay the money to the State Government.
6. We have heard the learned advocates appearing for the respective parties and perused the recitals of the Tender Document. It is the case of the petitioner-Company that since it was unable to procure the Bank Guarantee in view of the bank holiday i.e on 26.04.2025 and 27.04.2025 and as the bank officials informed the petitioner-Company that the Bank Guarantee requires 4 to 5 working days, they were unable to procure the Bank Guarantee and requested the respondent to accept the bid security by way of RTGS/NEFT or Demand Draft. Thus, due to the inaction and failure of the petitioner-Company in procuring the Bank Guarantee, the petitioner has challenged Clause 14 of the Tender Document. Clause 14.1 specifies the bid security, which has to be furnished in the form of Bank Guarantee by an acceptable bank and payable at Gandhinagar, Gujarat in favour of the State Government and substantially the same format as prescribed at Annexure- II of Schedule-I (format of bid security). Clause 14.2 refers that the bid security shall be for Rs.45,22,859/- and the same mentions about the particulars of beneficiary such as the bank name HDFC Bank and the account number along with the IFSC Code.
7. The Annexure-II of the format of bid is also prescribed, which is addressed to the Commissioner of Geology and Mining.
8. Thus, the petitioner was required to furnish the bid security as per Annexure-II of the Tender Document, which he did not do within a specified period on the ground of closure of the bank on 26.04.2025 and 27.04.2025 Page 4 of 7 Uploaded by MARY VADAKKAN(HC00204) on Thu Jun 26 2025 Downloaded on : Sat Jun 28 00:51:44 IST 2025 NEUTRAL CITATION C/SCA/7380/2025 JUDGMENT DATED: 18/06/2025 undefined respectively. Having failed to do so, he requested the respondent to accept the bid security in the form of RTGS/NEFT or Demand Draft. The entire case of the petitioner hinges on the Rules. The same finds place at Clause 1.4 and it refers as under :
"1.4 The e-auction would be conducted in accordance with the Act, the Auction Rules, the Minerals (Evidence of Mineral Content) Rules, 2015 any other order or notification issued by the Central Government pursuant to the Act and this Tender document."
9. At this stage, we may refer to the relevant Rule 9(5) of the Rules, which reads as under :
"(5) (A) a technical bid comprising amongst others, documentary evidence to confirm eligibility as per the provisions of the Act and the Rules made thereunder to participate in the auction, bid security and such other documents and payments as may be specified in the tender document; and (B) an initial price offer which shall be a percentage of value of mineral despatched.
[Provided that bid security shall be for an amount equivalent to 0.25 percent of the value of estimated resources of fifty crore rupees, whichever is lower, and shall be submitted in the form of a bank guarantee or through security deposit:
10. A plain and simple reading of the aforesaid Rule, exposits that in the bid security and such other documents and payments is required to be confirmed by a bidder as specified in the Tender Document. Proviso to sub- clause (B) of sub-Rule (5) of Rule 9 mentions that the bid security shall be submitted in the form of a Bank Guarantee or through security deposit. The respondent, in his wisdom and as per its requirement, has opted for the Bank Guarantee, which has to be furnished as a bid security, as per the format of Annexure II. We do not find any illegality committed by the respondent in calling upon the bidders to furnish the bid security in a Page 5 of 7 Uploaded by MARY VADAKKAN(HC00204) on Thu Jun 26 2025 Downloaded on : Sat Jun 28 00:51:44 IST 2025 NEUTRAL CITATION C/SCA/7380/2025 JUDGMENT DATED: 18/06/2025 undefined particular format. In the commercial wisdom of the respondent the security deposit is called for to be furnished in the particular manner, the Court cannot set aside or question such document unless it is illogical illegal and arbitrary, which can compel this Court to interfere in the Tender Document. We are informed that seven bidders have furnished the Bank Guarantee in the same format, hence, this Court cannot interfere in the tender process and if such course is permitted, the Courts would be doing injustice to other parties, who have refrained from entering the bidding process because of want of furnishing the bid security in other format, which is not prescribed in the Tender Document. So far as the violation of the CVC guidelines are concerned, we may refer that Clause 4.11, which has been relied upon by the petitioner the same also adopts the pari materia expression which has been incorporated in the tender form, i.e. the bid security can be obtained in the form of insurance security bonds, account payee demand draft, fixed deposit, bankers cheque or bank guarantee. In the present case, the respondent has deemed fit to call for the bid security in the form of Bank Guarantee as per the prescribed format looking to their exigencies and as per their commercial requirement, which facilitates the tender process. We may at this stage, refer to the decision of the Supreme Court in the case of Jagdish Mandal Vs. State of Orissa and Ors. (2007) 14 SCC 517, the relevant paragraph is as under :
22. Judicial review of administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias and malafides. Its purpose is to check whether choice or decision is made 'lawfully' and not to check whether choice or decision is 'sound'. When the power of judicial review is invoked in matters relating to tenders or award of contracts, certain special features should be borne in mind. A contract is a commercial transaction. Evaluating tenders and awarding contracts are essentially commercial functions. Principles of equity and natural justice stay at a distance. If the decision relating to award of contract is bona fide and is in public interest, courts will not, in exercise of power of judicial review, interfere even if a procedural aberration or error in assessment or prejudice to a tenderer, is made out. The power of judicial review will not be permitted to be invoked to protect private interest at Page 6 of 7 Uploaded by MARY VADAKKAN(HC00204) on Thu Jun 26 2025 Downloaded on : Sat Jun 28 00:51:44 IST 2025 NEUTRAL CITATION C/SCA/7380/2025 JUDGMENT DATED: 18/06/2025 undefined the cost of public interest, or to decide contractual disputes. The tenderer or contractor with a grievance can always seek damages in a civil court.
Attempts by unsuccessful tenderers with imaginary grievances, wounded pride and business rivalry, to make mountains out of molehills of some technical/procedural violation or some prejudice to self, and persuade courts to interfere by exercising power of judicial review, should be resisted. Such interferences, either interim or final, may hold up public works for years, or delay relief and succour to thousands and millions and may increase the project cost manifold. Therefore, a court before interfering in tender or contractual matters in exercise of power of judicial review, should pose to itself the following questions :
i) Whether the process adopted or decision made by the authority is mala fide or intended to favour someone.
OR Whether the process adopted or decision made is so arbitrary and irrational that the court can say : 'the decision is such that no responsible authority acting reasonably and in accordance with relevant law could have reached.'
ii) Whether public interest is affected.
If the answers are in the negative, there should be no interference under Article 226. Cases involving black-listing or imposition of penal consequences on a tenderer/contractor or distribution of state largesse (allotment of sites/shops, grant of licences, dealerships and franchises) stand on a different footing as they may require a higher degree of fairness in action.
11. Thus, in view of the express caution which the Courts have to adopt as expressed by the Supreme Court while exercising the power of the judicial review in administrative action relating to commercial transactions, we cannot interfere with the wisdom or requirement of the respondent in prescribing the bid security to be furnished in the format Annexure II. The judgments, on which the reliance is placed, cannot come to the rescue of the petitioner in view of the peculiar facts of the case.
12. In view of the above, the writ petition fails. The same is dismissed. Rule is discharged.
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