Jammu & Kashmir High Court - Srinagar Bench
Rural Contractors Welfare ... vs Union Territory Of Jk & Ors on 17 August, 2021
Serial No. 124
Supplementary-1 List
HIGH COURT OF JAMMU & KASHMIR AND LADAKH
AT SRINAGAR
WP(C) No. 1602/2021; CM No. 5391/2021
Dated: 17th of August, 2021.
Rural Contractors Welfare Association & Ors.
... Petitioner(s)
Through:
Mr Mohammad Ashraf Wani, Advocate.
Versus
Union Territory of JK & Ors.
... Respondent(s)
Through: -
Mr M. A. Chashoo, AAG.
CORAM:
Hon'ble Mr Justice Ali Mohammad Magrey, Judge.
(JUDGMENT)
01. By medium of the instant Petition, the Petitioners have
challenged the NIT No. 59 of R&B/4727-37 of 2021-22 dated 28th of July,
2021 and NIT No. 60 of R&B/4899-4908 of 2021-22 dated 29th of July, 2021.
A direction is also sought in the name of the Respondents to allow all the
Contractors to participate in the bidding process for the works which have
been put to tender in terms of the aforesaid tender notices.
02. Learned Counsel for the Petitioners submitted that the
Respondents, by incorporating the condition in the impugned NITs to the
effect that all the Contractors shall upload card verification certificate, has
deprived most of the Contractors in participating in the process, thereby
WP(C) No. 1602/2021; CM No. 5391/2021
resulting in reduction of competition. It is further submitted that the aforesaid
condition has seriously prejudiced the rights and interests of the Petitioners
and that the same has been done only with a view to give benefit to some blue-
eyed Contractors.
03. Heard the learned counsel for the parties, perused the pleadings
on record and considered the matter.
04. At the very outset, what requires to be stated is that as per settled
legal position, the tender issuing authority is the best judge of its interests/
needs and that it is always open to the said authority to suitably prescribe the
eligibility criteria so as to best serve its purposes. Whenever a term/ condition
is prescribed in the eligibility criteria, it might hurt the interests of someone
or the other, but, for that reason, the said term/ condition in the eligibility
criteria cannot be labelled as malafide or arbitrary.
05. Besides, the Courts are expected to exercise judicial restraint in
interfering with the administrative action, particularly in the matter of tender
or contract. Ordinarily, the soundness of the decision taken by the tender
issuing authority ought not to be questioned, but the decision-making process
can certainly be subject to judicial review. The soundness of the decision may
be questioned, firstly, if the decision made is so arbitrary and irrational that
the Court can say that the decision is such that no responsible authority acting
WP(C) No. 1602/2021; CM No. 5391/2021
reasonably and in accordance with relevant law could have reached or;
second, if the process adopted or decision made by the authority is malafide
or intended to favour someone or; third, if the public interest is affected. In
the case on hand, the decision of the Respondents in fixing the terms and
conditions in the impugned NITs cannot be said to be one where they have
acted in a manner in which no responsible authority acting reasonably and in
accordance with the relevant law would have acted. Furthermore, a bare
perusal of the pleadings on record, does not indicate that the decision made
by the authority is malafide or intended to favour someone. Likewise, the third
ground of public interest is also not affected in the present case because while
it may be in public interest to have greater competition, it is also in public
interest that all the tender conditions are complied with as prescribed by the
tender issuing authority and that there is no uncertainty in that area.
06. Law on the subject of scope of judicial review in the matters of
Contract is no more res integra.
07. In case titled 'Tata Cellular V. Union of India: (1994) 6
Supreme Court Cases 651', at Paragraph No.94, Hon'ble the Supreme Court
of the country, while dealing with the issue similar to the one subject matter
of the instant Petition, evolved the following principles:
1. "The modern trend points to judicial restraint in administrative action;
2. The Court does not sit as a court of appeal but merely reviews the
manner in which the decision was made;
WP(C) No. 1602/2021; CM No. 5391/2021
3. The Court does not have the expertise to correct the administrative
decision. If a review of the administrative decision is permitted it will
be substituting its own decision, without the necessary expe4rtise which
itself may be fallible;
4. The terms of the invitation to tender cannot be open to judicial scrutiny
because the invitation to tender is in the realm of contract. Normally
speaking, the decision to accept the tender or award the contract is
reached by process of negotiations through several tiers. More often
than not, such decisions are made qualitatively by experts;
5. The Government must have freedom of contract. In other words, a 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 (including its other facts
pointed out above) but must be free from arbitrariness not affected by
bias or actuated by mala fides; and
6. Quashing decisions may impose heavy administrative burden on the
administration and lead to increased and unbudgeted expenditure."
08. In case titled 'Sterling Computers Limited V. M&N
Publications Ltd: (1993) 1 SCC 445', the Apex Court, at Paragraph No.12,
has laid down as under:
"In contracts having commercial element, some more
discretion has to be conceded to the authorities so that they may
enter into contracts with persons, keeping an eye on the
augmentation of the revenue. But even in such matters they have to
follow the norms recognized by courts while dealing with public
property. It is not possible for courts to question and adjudicate
every decision taken by an authority, because many of the
Government Undertakings which in due course have acquired the
monopolist position in matters of sale and purchase of products and
with so many ventures in hand, they can come out with a plea that it
is not always possible to act like a quasi-judicial authority while
awarding contracts. Under some special circumstances a discretion
has to be conceded to the authorities who have to enter into contract
giving them liberty to assess the overall situation for purpose of
taking a decision as to whom the contract be awarded and at what
terms. If the decisions have been taken in bona fide manner although
not strictly following the norms laid down by the courts, such
decisions are upheld on the principle laid down by Justice Holmes,
that courts while judging the constitutional validity of executive
decisions must grant certain measure of freedom of 'play in the
joints' to the executive."
WP(C) No. 1602/2021; CM No. 5391/2021
09. Again, the Apex Court, in case titled 'Directorate of Education
& Ors. V. Educomp Datamatics Ltd. And Ors: (2004) 4 SCC 19', while
applying the principles enunciated in Tata Cellular's case (supra), at
Paragraph No.12, observed, thus:
"12. It has 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, malafide 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, wise or logical. The Courts can interfere only
if the policy decision is arbitrary, discretionary or malafide."
On an appreciation of the law laid down above, what comes to
limelight is that the modern trend points to judicial restraint in administrative
action and that the Court does not sit as a 'Court of Appeal', but merely
reviews the manner in which the decision was made. It has also been declared
that Court does not have the expertise to correct the administrative decision
and that if a review of the administrative decision is permitted, it will be
substituting its own decision, without the necessary expertise which itself may
be fallible. Furthermore, fair play in the joints is a necessary concomitant for
an administrative body functioning in an administrative sphere or quasi-
administrative sphere and quashing administrative decisions may impose
heavy administrative burden on the administration and lead to increased and
unbudgeted expenditure.
WP(C) No. 1602/2021; CM No. 5391/2021
10. It is, thus settled that public authorities must be left with the same
liberty as they have in framing the policies, even while entering into contracts
because many contracts amount to implementation or projection of policies of
the Government. But it cannot be overlooked that unlike policies, contracts
are legally binding commitments and they commit the authority which may
be held to be a State within the meaning of Article 12 of the Constitution of
India in many cases for years. It is for this reason that the Courts have
impressed that even in contractual matters the public authority should not have
unfettered discretion. In contracts having commercial element, some more
discretion has to be conceded to the authorities so that they may enter into
contracts with persons keeping an eye on the augmentation of the revenue.
But, even in such matters, they have to follow the norms recognized by Courts
while dealing with public property. It is not possible for the Courts to question
and adjudicate every decision taken by an authority because many of the
Government Undertakings, which in due course have acquired the monopolist
position in matters of sale and purchase of products and with so many ventures
in hand, they can come out with a plea that it is not always possible to act like
a quasi-judicial authority while awarding contracts. Under some special
circumstances, a discretion has to be conceded to the authorities who have to
enter into contract by giving them liberty to assess the overall situation for
purpose of taking a decision as to whom the contract be awarded and at what
terms. If the decisions have been taken in bonafide manner, although not
WP(C) No. 1602/2021; CM No. 5391/2021
strictly following the norms laid down by the Courts, such decisions are
upheld on the principle laid down by Justice Holmes that Courts, while
judging the constitutional validity of executive decisions, must grant certain
measure of freedom of 'play in the joints' to the executive.
Looking at the instant case in the above perspective, the
Petitioners have not been able to establish before the Court that the decision
taken by the Respondents in fixing the terms and conditions of the impugned
NITs is an arbitrary exercise of power or that the same was/ is malafide in
nature. In 'Jagdish Mandal v. State of Orissa: (2007) 14 SCC 517', at
Paragraph No.22, the Hon'ble Supreme Court held, thus:
"22. .... 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."
From a bare perusal of the pleadings placed on record, it is more
than apparent that the decision taken by the Respondents in fixing the terms
WP(C) No. 1602/2021; CM No. 5391/2021
and conditions with respect to the impugned NITs was certainly not irrational
in any manner whatsoever or intended to favour anyone.
11. For all that has been said and done hereinabove, I do not find any
merit in this Petition. It entails dismissal and is, accordingly, dismissed, along
with the connected CM(s).
12. No order as to costs.
(Ali Mohammad Magrey)
Judge
SRINAGAR
August 17th, 2021
"TAHIR"
i. Whether the Judgment is reportable? Yes/ No.
ii. Whether the Judgment is speaking? Yes/ No.
TAHIR MANZOOR BHAT
2021.08.17 16:43
I attest to the accuracy and
integrity of this document
