Bombay High Court
Satish Kumar Sharma vs Bharat Heavy Electricals Limited on 8 December, 2009
Bench: D.D. Sinha, F.M. Reis
1
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH ; NAGPUR.
WRIT PETITION NO.3985/2009
PETITIONER: Satish Kumar Sharma, carrying on business
under the name and style of M/s.
S.K.Sharma, as sole proprietor thereof
having its Office at E-18, Luna Street,
Bidhan Nagar, Durgapur-71312, West
Bengal.
VERSUS
RESPONDENT:
Bharat Heavy Electricals Limited,
Government of India Undertaking, having its
a
Office at Power Sector, Western Region, 345,
Kingsway, Nagpur440 001.
AND
WRIT PETITION NO.3986/2009
PETITIONER: Satish Kumar Sharma, carrying on business
under the name and style of M/s.
S.K.Sharma, as sole proprietor thereof
having its Office at E-18, Luna Street,
Bidhan Nagar, Durgapur-71312, West
Bengal.
VERSUS
RESPONDENT: Bharat Heavy Electricals Limited, a
Government of India Undertaking, having its
Office at Power Sector, Western Region, 345,
Kingsway, Nagpur440 001.
AND
::: Downloaded on - 09/06/2013 15:23:30 :::
2
WRIT PETITION NO.3987/2009
PETITIONER: Satish Kumar Sharma, carrying on business
under the name and style of M/s.
S.K.Sharma, as sole proprietor thereof
having its Office at E-18, Luna Street,
Bidhan Nagar, Durgapur-71312, West
Bengal.
VERSUS
RESPONDENT: Bharat Heavy Electricals Limited, a
Government of India Undertaking, having its
ig Office at Power Sector, Western Region, 345,
Kingsway, Nagpur440 001.
=========================================================
Mrs. T.D.Khade, Advocate, for petitioner
Mr. R.S.Sundaram, Advocate, for Respondent
=========================================================
CORAM : D.D.SINHA & F.M.REIS, JJ.
th
DATE : 8 DECEMBER
, 2009
.
Common Judgment (Per F.M.Reis, J.)
1. Rule. Returnable forthwith. Heard finally by
consent of parties.
2. The petitioner are challenging the action of the
respondent authority for not considering his technical bid
pursuant to the Tender Enquiry Notice dated 10.6.2009. The
Writ Petition No. 3985/2009 is in respect of notice inviting
sealed tenders relating to T.S No.BHEL/PW/PUR/VNT/
MMS/654 from the bidders for the purpose of receipt of
materials, unloading, verifying, shifting, staking, preservation
and handing over of components of boiler and auxiliaries,
electrostatic precipitator and its auxiliaries, electrical
systems, controls and instrumentation of boiler and TG
packers, HP and LP Piping, Refractory and Insulation,
BHEL's T & P and Components and Equipments of various
other items and providing services for Material Management
for 2 x 500 MW Super Thermal Power project Stage-IV Unit
Nos. 11 and 12 at NTPC Vindhyachal, Distt. Sidhi Madhya
Pradesh.
The Writ Petition No. 3886/2009 is with regard to
the notice inviting sealed tenders relating to TS
No.BHEL/PW/PUR/RTS/MMS/660 from bidders for the
purpose of receipt, unloading, verifying, stacking,
preservation etc. of project materials of boiler & aux, steam
turbine, turbo generator & aux, electrical, C&I, piping, lining
& insulation and other materials including BHEL T & P,
providing materials management services etc for for 2 x 500
MW Unit#5&6, Rihand Super Thermal Power station of
NTPC, Distt. Sonbhadra, UP.
The Writ Petition NO. 3887/2009 is in respect of
notice inviting sealed tenders relating to TS
No.BHEL/PW/PUR/RGIT/MMS/662 from bidders for the
purpose of receipt of materials, unloading, verifying, shifting,
stacking, preservation and Bunker and Bunker Structure
and handing over of components of boiler and auxiliaries,
steam turbine
ig and auxiliaries, turbo-generator and
auxiliaries, electrostatic precipitator and its auxiliaries,
electrical systems, controls and instrumentation of boiler and
TG packers, HP and LP Piping, Refractory and Insulation,
BHEL's T & P and Components and Equipments of various
other items and providing services for Materials Management
for 4 x 500 MW Super Thermal Power project Jindal Power
Limited Phase-III (4x600 MW JPL STPP) Salibhat Tamnar
Village, Distt. Raigarh, Chattisgarh.
As all the contentions raised by the parties are
common and as such the petitions are heard and disposed of
by a common judgment.
3. It is the case of the petitioner that the respondent
floated a notice inviting the sealed tenders from the bidders
for the purposes of carrying out the work referred to herein
above and that the tender specifications with complete details
was posted on the Web Site of the respondent. Accordingly,
the petitioner down-loaded the same and decided to submit
his offer. All the documents required for submitting the said
tender form were obtained by the petitioner and as he
fulfilled all the qualifications, requirements as mentioned in
such notice and was eligible in every respect to participate in
bid for the said job as individual, the petitioner was
interested in submitting the said form. Along with the notice
inviting tender, the petitioner also obtained the procedure,
mode and manner of filing the technical bid, specifications
under the said contract. The said tender form was to be
submitted in two packets in separate sealed cover, describing
as Part-I Technical Bid and Part-II Price Bid and indicating
on each of the covers the tender & specification number, due
date and time as mentioned in the tender notice. The two
separate covers being Part-I and Part-II were to be enclosed
in a 3rd envelop Cover-3 along with requisite earnest money
deposit and those sealed covers were to be subscribed and
submitted to the Additional Manager (Purchases), having its
office at Bharat Heavy Electrical Limited, Power Sector,
Western Region, 345, Kings Way, Nagpur. The petitioner on
23rd June, 2009, sought certain clarifications regarding the
said notice inviting tender and by letter dated 2nd July, 2009,
the queries posed by the petitioner were duly clarified by the
respondent. The date for submitting the tender was
extended to 6th July, 2009 and the technical-cum-commercial
bid was intended to be opened on 7th July, 2009. The
petitioner submitted his bid in the prescribed format with the
appropriate authorities of the respondent strictly in terms of
the technical bid, specifications and notice inviting tender,
on 6th July, 2009, before 18.00 hours. As per the schedule,
the technical bids were due to be opened on 7th July, 2009,
and as such the petitioner's authorized representative was
present in the office of the respondent at the time of opening
of the technical-cum-commercial bid, along with 7 other
intending bidders. To the utter surprise of the petitioner's
representative, the envelop in Cover-3 containing petitioner's
technical-cum-commercial bid was not opened by the
concerned officers of the Respondent. The said
representative protested against the non-consideration of the
technical-cum-commercial bid of the petitioner and was
verbally informed by the said Officials that the said bid will
not be opened due to unsatisfactory performance report for
the earlier material management contract executed by the
petitioner on 2 x 500 MV STP Project No. 2006-07. The
petitioner disputed the said contention of the respondent and
lodged a written complaint with the Executive Director
complaining the arbitrary action on the part of the
respondent, particularly the officials of the respondent, for
not considering the technical-cum-commercial bid. As the
petitioner did not receive any feedback from the respondent
with regard to the steps in opening the technical-cum-
commercial bid, a reminder was sent on 18th July, 2009 and
a copy was also forwarded to the Chairman of the
respondent. Despite of representations, no favourable
response came forward from the respondent. Thereafter the
petitioner learnt that part-two of the tender documents were
to be opened, which meanst that the technical-cum-
commercial bid of the petitioner would not be considered and
accordingly, by letter dated 4th September, 2009, the
petitioner again issued a reminder to the respondent
requesting to look into the matter and to stop from further
processing of the said tender till such issue was resolved. It
is further the case of the petitioner that such action on the
part of the respondent is mala fide as respondent cannot
refuse to consider the technical-cum-commercial bid of the
petitioner on any justifiable ground. It is further his
contention that the decision making process adopted by the
respondent under the said tender suffers from legal infirmity
and that by refusing to open and consider the technical-cum-
commercial bid of the petitioner, the respondent has acted in
an unfair and discriminatory manner and such action on
their part fails to satisfy the test of reasonableness and is
unreasonable. It is further his contention that his right to
compete with the other bidders has been violated and
consequently he filed the petitions for a writ and/or direction
to consider the technical-cum-commercial bid of the
petitioner along with the other competitors and for the other
reliefs as stated in the petitions.
4. This court by order dated 17th September, 2009,
issued notice to the respondent and in the meantime, the
respondent was directed not to issue work order in relation to
tender in question. Thereafter, on 14th October, 2009,
learned counsel for the respondent stated that the entire
tender process in respect of tender in question was
completed and a work order had not been issued in view of
the interim order by this Court. The respondent was directed
to file an affidavit stating the steps taken pursuant to the
notice inviting tenders. Thereafter on 16th October, 2009,
this Court had passed an order, inter alia permitting the
respondent to proceed further with process of the tender
without prejudice to the rights of the petitioner.
5. The respondent filed their preliminary submissions
on 17th September, 2009. It is the contention of the
respondent that the petitioner has not come with clean
hands and suppressed the material facts from this Court. It
is the contention of the respondent that it is made very clear
in the notice inviting tender that the respondent reserves the
right to accept or reject any or all tenders without assigning
any reason whatsoever and it was made very clear in the
notice that respondent reserve their right to reject any tender
on the basis of "unsatisfactory performance" of the bidders in
any on going job or any similar job for the last 7 years or for
furnishing false information/declaration in the offer. It is
further their contention that due to power shortage in the
country, all the projects are time bound and any delay on
their part will directly upset the completion of the project
schedule and thereby affecting the electrical generation and
cause huge loss to the respondent and heavy penalty is
imposed by the customers on the respondent Company in
the form of liquidity damages and power generation loss etc.,
as per clauses of the contract and therefore, the respondent
company is bound to exercise caution while awarding the
contracts to its enlisted bidders and thus, those whose
performance was found very satisfactory and time bound and
meeting the tender qualifications are only considered by the
Tender Committee and therefore, the technical bid and price
bid are opened and the work is awarded after going through
the entire procedure. It is further the contention of the
respondent that Clause 12 of Qualification of Tender,
Section 1 of General Conditions of Contract, revised one,
dated 18/07/2008, only tenderers who have previous
experience in the work of other nature and description-
details in the tender specifications are accepted. As per
Clause 1.3.3.of the Section, it is mandatory on the part of a
tenderers to give a statement giving particulars, details
supported by documentary evidence of the various services
tendered, value of each work, site location, duration and
date of completion and also list of all site locations and
particulars and value of various services that are under
progress. It is further the contention of the respondent that
as per Officer Order No. BHEL.PW/PUR/654, dated 7th July,
2009, a Committee was formed to consider the suitability of
the petitioner for the current and future tender of material
management package price, based on review of their
performance of BHEL Vindyachal Stage-3 Site in view of the
submission of final bill by the petitioner. The committee
obtained the reports for the years 2003-04, 2004-05 and
2005-06. As per the recommendations of the said Committee
vide report dated 5th August, 2009, the over all score of the
petitioner worked out to 52.5% and it was concluded by the
said Committee that the performance of the petitioner was
"unsatisfactory". All the review reports were signed by both
the respondent companies and the authorized representative
of the Petitonier Company Mr. Choube, and the true copy of
the said report dated 5th August, 2009, has been produced by
the respondent. The said recommendations were confirmed
by the report dated 17th August, 2009. It is further the
contention of the respondent that the petitioner is not
entitled for any reliefs in the present petition.
Thereafter, the petitioner filed his reply dated 30th
September, 2009 to the said preliminary submissions. It is
not disputed by the petitioner that the respondent has
reserved the right to reject the tender on the basis of
"unsatisfactory performance" of the bidder in any on going
job for the last 7 years, but, however, it is the contention of
the petitioner that he had obtained the annual reports -
feedback report for 2003 to 2007 work as satisfactory. It is
further his contention that the process of constituting the
committee was deliberately started without any notice or
hearing to the petitioner, which resulted in injustice to the
petitioner.
6. Additional Counter affidavit was filed by the
respondent on 8th October, 2009, along with the annual
performance feedback report and valuation of the
performance for the work performed by the petitioner. An
affidavit dated 15th October, 2009, was also filed by the
respondent. A reply thereto was filed by the petitioner on
15th October, 2009. Another affidavit was filed by the
petitioner on 4th November, 2009. An additional affidavit was
filed by the respondent on 6th November, 2009, along with
the annexures.
7. We have heard Mrs. T.D.Khade, learned counsel
appearing for the petitioner as well as Mr. R.S.Sunderam,
learned counsel appearing for the respondent and perused
the records in the above petitions, and notes of submissions
filed by the respective counsels. The learned counsel for the
petitioner submitted that the respondent have acted
arbitrarily and deliberately refused to open the technical-
cum-commercial bid of the petitioner. It is further
submitted that the respondent has as an after-thought
issued a show cause notice and has fabricated the
documents to contend that the work performance of the
petitioner was "unsatisfactory". It is further the contention of
the petitioner that the whole exercise by the respondent was
only after the date of opening of the technical bid or offer,
which suggest that the respondent were acting in a high
handed manner and fabricated the record for the purposes of
denying the right of the petitioner to submit his tender along
with other bidders for the work. It is further her contention
that the question of appointing a committee to re-evaluate
the performance of the petitioner did not arise at all, as, in
any way, such exercise is in breach of the principles of
natural justice, as no opportunity was given to the petitioner
to submit his views with regard to the allegations sought to
be raised against the petitioner. It is further the submission
of the petitioner that he had been issued a satisfactory
certificate and the whole exercise on the part of the
respondent is to show that such certificate has been wrongly
issued by resorting to means whereby documents have been
procured to show that the certificate is not genuine. It is
further the contention of the petitioner that the petitioner
has been deliberately side-lined from taking part in the
tender process and as such he is entitled for direction to the
respondent to open his technical-cum-commercial bid
submitted to the respondent. In support of her contentions,
the learned counsel has relied upon the following judgments;
(i) 2009 (6) SCC 171 in case of Meerut Development
Authority vs. Association of Management Studies
and another
(ii) 1997 (1) SCC 53 in case of Dutta Associates Pvt. Ltd.
vs. Indo Merchantiles Pvt. Ltd. and others
(iii)AIR 1994 SC 1277; M/s. Southern Painters vs.
Fertilizers & Chemicals Travancore Ltd. and another .
8 On the other hand, learned counsel appearing for
respondent has submitted that the work done by the
petitioner was unsatisfactory and in support of his
contention, he produced the documentary evidence of
monthly valuation of the work done by the petitioner, which
discloses that except for the first two months, the work done
in subsequent months was unsatisfactory. It is further his
contention that the certificate relied upon by the petitioner is
not authentic and the same has been issued by wrong
manner without any authority and without following due
process for issuance of such certificate. It is further his
contention that an Evaluation Committee was constituted to
evaluate the performance of the petitioner and after reviewing
the record of the respondent, the Committee came to the
conclusion that the performance of the petitioner was
unsatisfactory. It is further the contention of the learned
counsel that the monthly reports have been duly signed by
the authorized representative of the petitioner and as such
the petitioner was very well aware of the score he attained
during the period when his performance was being
evaluated. It is further his contention that the work which is
tendered is in connection with the power generation and as
such the same was time bound and consequently it was an
interest of the respondent to ensure that the parties who are
entitled to bid have a good reputation and were not subjected
to any unsatisfactory work at the earlier point of time. It is
further the contention of the learned counsel that
considering the evaluation/ performance of the petitioner,
the respondent were justified in refusing to open the
technical bid of the petitioner as his performance was
unsatisfactory. It is further his contention that the petitioner
is not entitled to any reliefs in the present petitions as the
action on the part of the respondent is in conformity with the
law and there is no arbitrariness or any mala fides
established by the petitioner which calls for interference in
the present petition. It is also the contention of the learned
counsel that the tender process has been completed and the
respondent have issued the work order to the successful
tenderer whose bids have been accepted. It is further his
contention that pursuant to the show cause notice and based
on the committee's recommendations, the respondent had
issued a letter dated 24th October, 2009, suspending the
business dealing with the petitioner for a period of six
months. The learned counsel has relied upon the judgment
reported in 2007 (14) SCC 517 in case of Jagdish Mandal
vs. State of Orissa and others.
9. From the forgoing submissions, the only point to
be considered is as to whether the respondent were justified
not to open the technical bid of the petitioner since his
performance for the earlier contract awarded at Vindyachal
Site (Stage-III 2x500 MW) executed from 2003 to 2007 was
unsatisfactory.
10. The learned counsel for the petitioner has relied
upon the annual performance feed-back report which is at
page 139 to 147. On perusal of the same, we find that the
said report is signed by the Head of the Department and
discloses that the performance of the petitioner was
satisfactory. But, however, the correctness of the said report
is vehemently disputed by the respondents. It is their
contention that the said document is not authenticated and
genuine document and that same is not signed for and on
behalf of the respondent by an authorized officer. It is
further their contention that it is not a genuine and
clarificatory document and as such the same does not
disclose the correct picture of the performance of the
petitioner in the earlier contract.
11. In fact, the said document does not carry any date,
nor does it have any signature of the Construction Manager.
Apart from that, the respondent have produced the monthly
review with the suppliers along with the annual performance
feed-back of supplier for the different months during the
period when the petitioner carried work for the respondent.
On perusal thereof, we find that for the month of December,
2003, the weightage score as per the monthly review
between the petitioner and the respondent worked out to
73.3%. For the month of January 2004, the same worked
out to 60%. For the months of January to April 2004, the
total weightage score is 41.76%. For the month of June,
2004, the said score is 45.6%. For September 2004, the
score is 46.30%. For October 2004, it is 43.6%. For
December 2004, it is 42.0%. For February 2005, the same is
30.40%. From April to June 2005, it is 36.80%, for July
2005, the score is 45.3%. For August to September, 2005,
the same is 45.3% and from November 2005 to January
2005, the same is 35.3% and from February 2006 to March
2006, the same is 33.3%. There is no dispute that, to attain
the performance as satisfactory, the weightage score should
be 61% to 80%. From the forgoing annual performance feed-
back with the supply report, we find that except for the
months of December 2003 and January, 2004, the
weightage scored for all the remaining months during the
period when the petitioner carried out the works for the
respondent, the performance was unsatisfactory. The said
reports are supported by the scores scored in each of the
different heads such as quality rates, delivery rates, service
rates and other rates, duly countersigned by the
representative of the petitioner as well as the respondent.
The contention of the learned counsel for the petitioner that
the said reports were not submitted to the petitioner cannot
be accepted as we find that the scores scored in each of the
said heads for each of the period referred to hereinabove have
been duly signed by the representative of the petitioner. The
performance feed-back report for respective periods is only
the sum total of scores scored in each of the head as referred
to in the report of the monthly review with the supplies,
which has been produced along with the individual annual
performance feedback of the suppliers. There is no dispute
raised by the petitioner to the effect that the said reports
have not been signed by the representative of the petitioner.
As such, it cannot be accepted on the basis of the evidence
on record that the petitioner were not aware that as per the
scores scored by the petitioner during the period when the
work was carried out by the petitioner, the same was not to
the satisfaction of the respondent. On the face of such
evidence produced by the respondent, we find that the
annual performance feed back of the suppliers produced by
the petitioner for the period from 1.11.2003 to 30.4.2007 is
not in conformity with the scores scored by the petitioner for
the individual months during the said period. This shows
that prima facie the evaluation made as per the said
document produced by the petitioner at page 139 is not in
consonance with the records which otherwise disclose that
the performance of the petitioner was unsatisfactory.
Consequently, the said documents which have been
produced by the respondent and which are maintained as
per the procedure in the regular course of the execution of
the work disclose that the work of the petitioner prima facie
was unsatisfactory considering the scores scored by the
petitioner during the months referred to hereinabove.
12. In terms of the agreement, the said reports were
prepared in view of the Clause 11.5.1, executed between the
petitioner and the respondent, which inter alia contemplates
that the contractor shall submit periodical progress report
and on the basis thereof the work of the petitioner was
evaluated. Considering the said documents produced by the
respondent, the Committee constituted by the respondent
submitted a report on 5th August, 2009 and came to the
conclusion that the annual performance of the petitioner
from the period 1.11.2003 to 31.3.2004 was unsatisfactory;
1.4.2004 to 31.3.2005 was also unsatisfactory and from
1.4.205 to 31.3.2006 was also unsatisfactory. The
respondent have also produced the statements of
Mr.S.L.Sohani and Mr. R.N.Deshpande to the effect that the
said certificate issued by them was given by oversight by not
considering the earlier reports of the petitioner. As such, it
appears that there are disputed questions of fact as to the
genuineness of the said annual report produced by the
petitioner and on the basis of material on record, we find
that, prima facie, the said document is not in accordance
with the monthly reports prepared and maintained by the
respondent.
13. There is no dispute that one of the condition of
tender stipulated that the respondent were entitled not to
consider the tenders of the tenderers in cases in which the
work performed by them was unsatisfactory. As such, on the
basis of material on record, prima facie, we find that in view
of the documents produced by the respondent, the work
performed by the petitioner was unsatisfactory and as such
the petitioner was not entitled to take part in the tender
process.
14. Be that as it may, we find that the manner in
which the respondent have acted in the present matter is not
at all appropriate. The terms of agreement executed between
the petitioner and the respondent clearly provided that the
respondent had a right to take necessary action against the
petitioner including the power to terminate the contract and
seek justification for delay & unsatisfactory work, which
admittedly was not exercised by the respondent. This shows
that the respondent have not been vigilant to exercise the
rights reserved for them during the period of the contract to
ensure that the work was performed satisfactorily during the
period of the contract. The contract was up to March 2007
and only after the tender process in the present case had
started, the respondent thought it fit to take necessary steps
to re-evaluate the performance of the petitioner and
appointed a Committee for the purpose of assessing the work
performed by the petitioner during the said period. This
delay on the part of the respondent does not at all augure
well for the purpose of transparency & due performance of a
public authority. Such inaction has not at all been explained
by the Respondent. It is not at all comprehended as to how a
certificate could have been issued in such a casual manner
by an official of the respondent to the effect that the work
done by the petitioner was satisfactory, when, on the
contrary, the record discloses otherwise. The action sought
to be taken by the respondent does not appear effective &
decisive and we expect that necessary action shall be taken
against the concerned officials to see that such conduct is
not repeated. The procedure whereby the performance is to
be evaluated has to be promptly streamlined and transparent
to ensure that the decision making process of the respondent
cannot be faultered. We assume that the General Manager of
the respondent shall take remedial measures to ensure that
such certificates are not issued without proper compliance of
the requirements as contemplated in the procedure framed
by the respondent.
15. When a person desires to enter into a contract, the
credibility of a person who is to be entrusted with the
performance of the work is very important. This can be
ascertained by evaluating the past experience and work done
by such a person. This exercise has been done by the
respondent by appointing the said Committee which came to
the conclusion that the performance of the petitioner was
unsatisfactory. The decision of the respondent not to open
the technical bid of the petitioner was on the basis of
evaluating his past history of the manner in which previous
work was conducted by the petitioner for the respondent.
Considering the material produced by the respondent, we
find that such decision making exercise cannot be faultered.
16. In the judgment reported in 2009(6) SCC 171,
Meerut Development Authority ..vs.. Association of
Management Studies and another (supra) relied upon by
the learned counsel for the petitioner, the Apex Court has
held that a tender is an offer & that terms of the invitation to
tender cannot be open to judicial scrutiny because the
invitation to tender is in the realm of the contract. However,
a limited judicial review may be available in cases where it is
established that the terms of the invitation to tender were so
tailor-made to suit the convenience of any particular person
with a view to eliminate all others from participating in the
bidding process. The bidders participating in the tender
process have no other right except the right to equality and
fair treatment in the matter of evaluation of competitive bids
offered by the interested person in response to notice inviting
tender in a transparent manner and free from hidden
agenda. In the present case, we find that the respondent
were justified in not opening the technical bid, as, on the
basis of material on record, the performance of the petitioner
during the earlier work was prima facie unsatisfactory. The
said documents were duly signed also by the representative
of the petitioner. As such, it cannot be said that there was
any hidden agenda on the part of the respondent to side-line
the petitioner from said process. The petitioner also has not
demonstrated that any other tenderer in similar situation
has been benefitted by the respondent.
17. In the judgment of Datta Associates Pvt. Ltd.
(Supra), the Apex Court has held inter alia that the decision
making process should be transparent, fair and open. And
in the judgment of M/s. Southern Painters (Supra) relied
upon by the learned counsel appearing for the petitioner, the
Apex Court reiterated that black listing without a show cause
and an opportunity to be heard would entitle the contractor
from being included in the list of qualified contractors. In the
present case, the petitioner has not been black listed. On
the contrary, a show cause notice has been given and the
petitioner has duly replied to the same and the action is
initiated. We are not called upon to decide or consider
whether the action on the part of the respondent to issue
such show cause notice and the action sought to be initiated
thereby is justified. The same will have to be decided on its
own merits in case such occasion arise in appropriate
Forum.
18. In the judgment of the Apex Court relied upon by
the learned counsel for the respondent in the case of
Jagdish Mandal vs. State of Orissa and others (Supra),
the Apex Court has held that 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 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 inferences, 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. In the present case, we find that it
would not be appropriate to interfere in he tender process
considering that the respondent have stated on affidavit that
time being the essence of contract, the contract work has
been awarded to the successful tenderer and they are already
executing the work at site. The tender in the present case
relates to power project and work has to be completed within
stipulated time period. As the work has already been allotted
and considering that the project has to be completed within a
specific time frame, it would not be appropriate to interfere
with such tender process which would result in additional
expenditure to the respondent and delay the work initiated.
Apart from that, the petitioner can claim damages in a Civil
Court in case the stand of the respondent is established and
found to be incorrect.
19. In 2005 (6) SCC 138, in case of Master Marine
Services (P) Ltd. .....vs..... Metcalef & Hodgkinson (P) Ltd
and another, the Apex Court has held that the Government
is the guardian of finances of the State. It is expected to
protect the financial interest of the State. The right to refuse
the lowest or any other tender is always available to the
Government. But the principles laid down in Article 14 of
the Constitution have to be kept in view while accepting or
refusing a tender. There can be no question of infringement
of Article 14 if the Government tries to get the best person or
the best quotation. The right to choose cannot be considered
to be an arbitrary power. Of course, if the said power is
exercised for any collateral purposes, the exercise of that
power will be struck down. Principles of judicial review
would apply to the exercise of contractual powers by
Government bodies in order to prevent arbitrariness or
favouritism. However, there are inherent limitations in
exercise of that power of judicial review. The modern trend
points to judicial restraint in reviewing administrative action.
The court does not sit as a court of appeal but merely reviews
the manner in which the decision was made. The Court does
not have the expertise to correct the administrative decision.
If a review of the administrative decision is permitted, which
will be substituting its own decision, without the necessary
expertise, which itself may be fallible. The Government
must have freedom of contract. 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, but must be free from arbitrariness not
affected by bias or actuated by mala fide. The quashing
decisions may impose heavy administrative burden on the
administration and lead to increased un-budgeted
expenditure. It has further been held that the award of a
contract, whether it is by private party or by a public body or
the State, is essentially a commercial transaction. In
arriving at a commercial decision, considerations which are
of paramount importance are commercial considerations,
which would include, inter alia, the price at which the party
is willing to work, whether the goods or services offered are of
the requisite specifications and whether the person tendering
is of the ability to deliver the goods or services as per
specifications. The State can choose its own method to arrive
at a decision and it is free to grant any relaxation for bona
fide reasons, if the tender conditions permit such a
relaxation. In the present case, we find that the respondent
have in fact appointed a Committee for the purposes of
evaluating and finding out the ability of the petitioner to
carry out the work which is sought to be tendered and the
Committee came to the conclusion that the work performed
by the petitioner earlier was unsatisfactory. The said
findings are based on material on record and as such, it
would not be proper to interfere in such tender process in
exercise of our powers of judicial review considering the
judgments of the Apex Court referred to hereinabove. The
method evolved by the Respondents cannot be considered
arbitrary and the decision making process does not appear to
be vitiated. We find that respondent have acted within the
ambit of law in not opening the technical-cum-commercial
bid of the petitioner, as prima facie the record establishes
that the work earlier performed by him was unsatisfactory,
which weighed on the respondents to take such a decision,
and considering the nature of work to be performed seems to
be justified.
20. In view of the above, we find that no interference
is called for in the tender process initiated by the respondent
and consequently the above petitions deserve to be dismissed
with no order as to costs. Rule is discharged.
JUDGE JUDGE
Rvjalit
