M/S Sangam (India) Ltd vs The State Of Assam And 3 Ors
2022 Latest Caselaw 1891 Gua

                                                                  Page No.# 1/12

GAHC010128122021




                      THE GAUHATI HIGH COURT
  (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)

                          Case No. : WP(C)/5698/2021


         M/S SANGAM (INDIA) LTD.
         A PUBLIC LIMITED COMPANY REGISTERED UNDER THE COMPANIES ACT
         1956 HAVING ITS REGISTERED OFFICE AT ATUN CHITTORGARH ROAD
         BHILWARA-311001
         RAJASTHAN INDIA
         REP. BY ITS AUTHORISED REPRESENTATIVE SRI RAM PRATAP AGARWAL
         S/O LT. GAJANAND AGARWAL
         AGED ABOUT 61 YEARS R/O NA PUKHURI ROAD
         TINSUKIA
         ASSAM


          VERSUS

         THE STATE OF ASSAM AND 3 ORS
         REP. BY T HE PRINCIPAL SECRETARY TO THE GOVT. OF ASSAM
         SOCIAL WELFARE DEPTT. JANATA BHAWAN DISPUR
         PIN-781006

         2:THE SECRETARY
         GOVT. OF ASSAM
          SOCIAL WELFARE DEPTT. JANATA BHAWAN DISPUR
          PIN-781006
          3:DIRECTOR
         DIRECTORATE OF SOCIAL WELFARE ASSAM
          UZANBAZAR
          GUWAHATI-781001
          4:MAFATLAL INDUSTRIES LTD.
         HAVING ITS REGD. OFFICE AT MAFATLAL HOUSE
          5TH FLOOR
          H.T. PAREKH MARG
          MUMBAI- 20
          REP. BY ITS AUTHORISED REPRESENTATIVE SHRI AKASH DHURI
                                                                            Page No.# 2/12

          R/O- A/204
          SAKAI MAULI CHS LTD.
          SAKAI NAGAR
          NAIGAON WEST
          VILL.- UMELA
          DIST.- PALGHAR
          MAHARASHTRA
          PIN- 401202.
          ------------

Advocate for : MR. D DAS SR. ADV Advocate for : GA ASSAM appearing for THE STATE OF ASSAM AND 3 ORS

BEFORE HON'BLE MR. JUSTICE KALYAN RAI SURANA

For the petitioner : Mr. D. Das, Senior Advocate, Mr. K. Mohammed, Adv. For the respondents: Mr. D. Mozumdar, Addl. A.G., Mr. K. Goswami, Addl. Sr. G.A., : Mr. B.D. Deka (Res. No.4).

        Date of hearing       : 16.03.2022.
        Date of judgment      : 31.05.2022.


                               JUDGMENT AND ORDER
                                        (C.A.V.)

Heard Mr. D. Das, learned Senior Counsel, assisted by Mr. K. Mohammed, learned counsel for the petitioner. Also heard Mr. D. Mozumdar, learned Addl. Advocate General, assisted by Mr. K. Goswami, learned Addl. Senior Govt. Advocate for the State respondent nos. 1 to 3 and Mr. B.D. Deka, learned counsel for respondent no.4.

2) By filing this writ petition under Article 226 of the Constitution Page No.# 3/12

of India, the petitioner has prayed (a) to set aside and quash the NIT no. DSW(ICDS) G/96/2021/19 dated 09.08.2021; (b) to direct the state respondents to forthwith cancel/ recall/ rescind and/or otherwise forebear from giving effect to the said NIT; (c) to set aside and quash point no. 1(8) of Section 1A of the said NIT; (d) to direct the state respondents to forthwith cancel/ recall/ rescind and/or otherwise forebear from giving effect to point no. 1(8) of Section 1-A of the said NIT; (e) to set aside and quash the corrigendum no. DSW(ICDS) G/96/2021/49 dated 10.08.2021; (f) for issuing mandamus not to disqualify the petitioner in terms of point no. 1(8) of Section 1A of the said NIT; (g) for a writ, direction or order to the respondent authorities so as to provide adequate relief to the petitioner for the ends of justice.

3) The petitioner is a company registered under the Companies Act, 1956 and it is claimed that it is one of the foremost producers of PV dyed yarn, cotton and OE yarn and also ready to stitch fabric, having its own in-house facility for spinning, weaving and processing with capacity of more than 1,00,000 meter per day. It is also claimed that the petitioner had been supplying uniform cloth materials to the satisfaction of the respondent authorities without any complain.

4) The learned Senior Counsel for the petitioner has submitted that in the past three financial years, the annual turnover of the petitioner was Rs.1,87,363 lakh in the year 2018-19, Rs.1,78,297 lakh in the year 2019-20, Rs.1,35,355 lakh in the year 2020-21 and therefore, the average annual turnover of the petitioner in the last three financial year was Rs.1,67,005 lakh. It was further submitted that for the purpose of supplying uniforms for Anganwadi workers and helpers for the year 2019-20, the respondent authorities had Page No.# 4/12

issued a NIT dated 11.07.2019. In the said tender, it was provided, amongst others, that if the bidder was the manufacturer, the manufacturer was exempted for submitting proof of past experience for supply of similar materials, in any government department and that the requisite experience was that supply should have been made previously for similar materials not relating to supply of sarees, chadar and mekhela only. It is submitted that in the present NIT dated 09.08.2021, as modified by a corrigendum dated 10.08.2021, there was a departure in Point no. 1(8) of Section 1-A relating to qualification criteria and it was prescribed that the bidder must enclose proof of past performance for supply of uniform saree/ chadar and mekhela only to any Govt. Department in any one year during past four years before the bid opening date along with the Government order copy for minimum of Rs.3.20 crore (approximately 40% of the tender value). Accordingly, it is submitted that the modified point no.1(8) of Section 1-A of the NIT dated 09.08.2021 is to oust competition as there are only very limited textile manufacturer who would be able to fulfill the said tailor- made eligibility criteria. It has further submitted that a textile manufacturer would normally manufacture and supply cloth, fabric, etc. and that from such fabric, saree, chadar and mekhela are produced as a finish product. Hence, it is submitted that the said point no. 1(8) of Section 1-A of the NIT is unreasonable and arbitrary. Moreover, it was submitted that the requirement of having past experience of supplying uniform saree, chadar and mekhela and has no nexus with the other eligibility criteria as well as the object sought to be achieved under the impugned NIT dated 09.08.2021. It was also submitted that the impugned tender condition, if allowed remain in the NIT, would result in creation of an artificial classification amongst the textile manufacturers, who otherwise have experience of supplying uniforms.

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5) The learned Senior Counsel for the petitioner has submitted that aggrieved by the point no. 1(8) of the impugned tender, the petitioner had submitted a representation dated 10.09.2021, followed by reminder dated 08.10.2021 to the Director of Social Welfare Department (respondent no.3), to allow the petitioner to participate in the tender, but there has been no response on the said representation.

6) By referring to a similar NIT dated 10.08.2021 issued by the Social Welfare department for supply of two additional sets of sarees/ local dress for Anganwadi worker and helpers under POSHAN Abhiyaan for the financial year 2020-21, it was submitted the same Directorate, who had floated impugned tender dated 09.08.2021, had simplified the eligibility condition no. 1(8) of Section 1-A relating to qualification criteria by providing that "bidder must enclose proof of past performance for supply of uniform, only to any Govt. Dept. in any one year during past four years before the bid opening date along with the Govt. order copy for minimum of Rs.4 crore (approximately 40% of the tender value)...". Accordingly, it has been submitted that a different eligibility criteria has been incorporated in the impugned NIT dated 09.08.2021, which was in departure to Point No. 1(8) of Section 1-A of the previous NIT dated 11.07.2019 and subsequent NIT dated 10.08.2021, which was sufficient to show that the experience criteria in the tender dated 09.08.2021 was to give advantage to one particular tenderer and to oust competition. Hence, it was submitted that the said tender condition no. 1(8) of Section 1-A of NIT dated 09.08.2021 was ex-facie illegal, arbitrary and unconstitutional being violative of the provisions of Article 14 of the Constitution of India. It was also submitted that ouster of competition would have a negative and devastative adverse effect on the public exchequer which would affect public interest.

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7) In support of his submission, the learned Senior Counsel for the petitioner has referred to the cases of (1) Monarch Infrastructure (P) Ltd. Vs. Commissioner, Ulhasnagar Municipal Corporation and Ors., (2000) 5 SCC 287 (2) Uflex Ltd. Vs. Govt. of Tamilnadu and Ors., (2022) 1 SCC 165 .

8) Per contra, the learned Addl. Advocate General has submitted that it is the prerogative of the Government to set up such terms and conditions of tender, as it deems appropriate so as to secure the interest of the State. Therefore, this Constitutional Court, while exercising jurisdiction under Article 226 of the Constitution of India, may not like to sit as an appellate authority for scrutinizing the various terms and conditions. By referring to the NIT dated 09.08.2021, it is submitted that the value of tender was Rs. 8.00 crore approximately and therefore, the requirement of the bidder to have a turnover of Rs.3.00 crore was not excessive. It was also submitted that there was no requirement that every single tender must have same terms and conditions for bidding and that there could not be any departure if the materials sought to be procured was the same/ similar. It was also submitted that the NIT dated 09.08.2021 was for supply of uniform saree/ mekhela and chadar to Anganwadi workers and helpers for the financial year 2021-22 and because of the present challenge, there has been a delay in supplying uniform to the beneficiaries. It was submitted that the tender process was justified and the tender condition No.1(8) of Section 1-A was only to ensure that after awarding the contract, the successful tender should not default in making timely supply.

9) In support of his submission, the learned Addl. Advocate General has placed reliance on the case of Uflex Ltd. (supra).

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10) The learned counsel for respondent no.4 has adopted the submissions made by the learned Addl. Advocate General for the State.

11) The relevant clause 1(8) Section 1-A relating to qualification criteria as provided in NIT dated 11.07.2019, NIT dated 09.08.2021, corrigendum dated 10.08.2021, and NIT dated 10.08.2021 are as follows:

"NIT dated 11.07.2019. 1(8). In case of manufacturer (as bidder), the manufacturer is exempted from submitting proof of Past Performance for supply of similar materials / articles in any Govt. Department. However, the manufacturer must have to furnish the documentary proof of running manufacturing unit for the quoted items (i.e. Chadar, Mekhela and Saree). The Director, Social Welfare, Assam reserves the right to reject any manufacturers who claim exemption under the above criteria, if the Directorate not fully convinced with the documentary evidence provided by the manufacturer to exemption.

But in case the bidder is not a manufacturer, the Bidder must enclose proof of Past performance for supply of similar materials/ articles in any Govt. Department (Proof of same to be submitted)."

NIT dated 09.08.2021. 1(8). Bidder must enclose proof of Past Performance for supply of uniform saree only to any Govt. Department in any one year during past four years before the bid opening date along with the Govt. order copy for minimum of Rs.3.20 crores (approximately 40% of the tender value) (prescribed format in Annexure-C). Proof of same to be submitted.

Corrigendum dated 10.08.2021. In Section 1-A, Qualification Criteria- Point No. 8 at Page No. 4 of tender Booklet may be read as:

Bidder must enclose proof of Past Performance for supply of uniform Saree/ Chader and Mekhela only to any Govt. Department in any one year during past four years before the bid opening date along with the Govt. Order Copy for minimum of Rs.3.20 crores (approximately 40% of the tender value) (prescribed format in Annexure-C). Proof of same to be submitted.

NIT dated 10.08.2021. 1(8). Bidder must enclose proof of Past Performance for supply of uniform, only to any Govt. Department in any one year during past Page No.# 8/12

four years before the bid opening date along with the Govt. order copy for minimum of Rs.4 crores (approximately 40% of the tender value) (prescribed format in Annexure-C). Proof of same to be submitted."

12) On examination of the tenders, it is seen that the NIT dated 10.08.2021 was for supply of two additional sets of uniforms for Anganwadi workers and helpers under Poshan Abhiyaan, Assam for financial year 2020-21. The tender in reference dated 10.08.2021 was for two additional sets of uniforms. Therefore, it can be presumed that there must have been a tender for sarees/ local dress for Anganwadi workers.

13) The NIT for supply of chadar and mekhela/ sarees is essentially a commercial tender, and in matters which are of commercial nature, the tendering authority would have a right to include any such tender condition, which is, in its discretion, appropriate. Therefore, merely because the items of supply is same, i.e. supply of uniform chadar and mekhela/ sarees, merely because there is a departure in particular tender clause, being clause no. 1(8) of Section 1-A of the NIT dated 09.08.2021, the Court is unable to hold that the variation of the particular clause of the NIT would vitiate the entire tender process so as to set aside and quash the NIT dated 09.08.2021 along with corrigendum dated 10.08.2021 of the clause No. 1(8) of Section 1-A of the said tender.

14) One of the submissions made by the learned Senior Counsel for the petitioner was that most of the textile manufacturers, manufacture and supply cloth/ fabric and that sarees/ mekhela and chadar are finished products, after those are processed from the cloth/ fabric. In this regard the Court is unable to accept the said contention because of the fact that in print and in audio visual media, sarees of textile manufacturers are found available on sale.

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Therefore, under such circumstances, the impugned tender clause 1(8) of Section 1-A of the NIT dated 09.08.2021 cannot be said to be absolutely irrational and illegal, or can be said to be in contravention of the Wednesbury's principle by holding that the said tender clause was so arbitrary and irrational that no responsible authority acting reasonably and in accordance with law would have reached such a decision.

15) It was submitted by the learned Senior Counsel for the petitioner that the requirement of having past experience of supplying uniform sarees, chadar and mekhela has no nexus as to the object sought to be achieved. In the said context, it is seen that the tender was floated for supply of sarees, chadar and mekhela and that the eligibility criteria contained in clause 1(8) of Section 1A of the said NIT was that the bidder must enclose proof of past performance for supply of uniform sarees, chadar and mekhela to any Govt. Department, cannot be said to have no nexus with the object sought to be achieved because the supply is for the said three items only. In this regard, it would be appropriate to quote paragraph 22 of the case of Jagdish Mandal v. State of Orissa, (2007) 14 SCC 517, which is quoted below:

"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 is 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 Page No.# 10/12

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 interference, 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."

16) With regard to the three questions as indicated in the hereinbefore referred case of Jangdish Mandal (supra), this Court has already held that the decision of the authorities in inserting clause 1(8) of Section 1-A of NIT dated 09.08.2021 was not arbitrary or irrational. Moreover, it has also been held that merely because few textile manufacturers, manufacture sarees, which is the stand of the petitioner, was not acceptable as it is not the plea of the petitioner that no textile manufacturer, manufactures sarees/ mekhela or chadar. Therefore, when the relevant tender clause has a nexus with the object sought to be achieved, the said tender clause cannot be held to be arbitrary or irrational. Moreover, even if few manufacturers participate in tender process Page No.# 11/12

instead of large number of participants, yet the same would not be sufficient ground to hold that public interest would be affected. Therefore, the two questions as indicated in paragraph 22 of the case of Jagdish Mandal (supra) are answered in the negative and against the petitioner.

17) It may be mentioned that the hereinbefore referred observation merely in case of Jagdish Mandal (supra) was relied upon and referred to in a recent judgment of the Supreme Court of India in the case of L.G. Projects Ltd. v. Vinod Kumar Jain (2022) 0 Supreme (SC) 246 , Civil Appeal No. 1846/2022 decided on 21.03.2022.

18) As this court has already answered the two questions, as posed in the case of Jagdish Mandal (supra), the decision of the Supreme Court of India in the case of Monarch Infrastructure (P) Ltd. (supra) , cited by the learned Senior Counsel for the petitioner would have no application in the present case, because in para 11 of the said case, the Supreme Court of India had observed that "broadly stated, the Courts would not interfere with the matter of Administrative action or changes made therein, unless the government's action is arbitrary or discriminatory or the policy adopted has no nexus with the object it seeks to achieve or is mala fide". In the present case, it is reiterated that the concerned tender clause No. 1(8) of Section 1-A of NIT dated 09.08.2021 cannot be held to be arbitrary or discriminatory and it cannot be held that the said clause has no nexus with the object sought to be achieved. Moreover, there is no material available on record from which it can be gathered insertion of clause 1(8) of Section 1-A was vitiated, being mala fide.

19) It may also refer to the decision of the Supreme Court of India in the case of Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corpn. Ltd., (2016) Page No.# 12/12

16 SCC 818, wherein it was emphasized that the author of the document is the best person to understand and appreciate its requirement, further observing that it is possible that the owner or employer of the project may give an interpretation to the tender documents that is not acceptable to the Constitutional Courts but that by itself is not a reason for interfering with the interpretation given. In the case of Uflex Ltd. (supra), the observations made in paragraph 47 is quoted below:

"47. Insofar as the participating entities are concerned, it cannot be contended that all and sundry should be permitted to participate in matters of this nature. In fact, in every tender there are certain qualifying parameters whether it be technology or turnover. The Court cannot sit over in judgment on what should be the turnover required for an entity to participate. The prohibition arising from only a Limited company being permitted to participate was again addressed by the corrigendum permitting LLPs to participate. If entities like Kumbhat and Alpha want to participate they must take some necessary actions. Alpha is already an LLP. Kumbhat cannot insist that it will continue to be a partnership alone and, thus, that partnerships must necessarily be allowed to participate ."

20) In view of above, the Court is of the considered opinion that the present challenge to the NIT bearing Tender No. DSW(ICDS) G/96/2021/19 dated 09.08.2021 including corrigendum dated 10.08.2021, including tender condition/ clause No. 1(8) of Section 1-A relating to qualification criteria, fails and accordingly, this writ petition stands dismissed, leaving the parties to bear their own cost.

JUDGE

Comparing Assistant