M/S Valley Security Agency vs Union Territory Of Jk & Ors
2021 Latest Caselaw 937 j&K/2

                                                                    Serial No. 127
                                                                 Supplementary-1 List

      HIGH COURT OF JAMMU & KASHMIR AND LADAKH
                     AT SRINAGAR


                WP(C) No. 1633/2021; CM No. 5466/2021


                                                    Dated: 20th of August, 2021.


M/S Valley Security Agency
                                                             ... Petitioner(s)
                                Through:
                      Mr Mir Manzoor Ahmad, Advocate.

                                   Versus

Union Territory of JK & Ors.
                                                          ... Respondent(s)

CORAM:

Hon'ble Mr Justice Ali Mohammad Magrey, Judge.

(JUDGMENT)

01. By medium of the instant Petition, the Petitioner has challenged

the validity of e-tender No. 36 of 2021 dated 3rd of August, 2021 issued by

Respondent No.3 under endorsement No. NIT/e-SS/36 of 2021 dated 3rd of

August, 2021 with regard to outsourcing of Security services for Government

Medical College and its associated Hospitals, Srinagar. A direction is also

sought in the name of the Respondents to issue fresh tenders for annual

contract for Security services at the Government Medical College and its

associated Hospitals, Srinagar or to drop the impugned conditions from the

aforesaid e-tender.

WP(C) No. 1633/2021; CM No. 5466/2021

02. Learned Counsel for the Petitioner submitted that the

Respondents, by incorporating the condition in the impugned NIT to the effect

that any firm claiming exemption under Aatmanirbhar Bharat Rozgar Yojana

(ABRY) should submit the requisite registration certificate and that any firm

not claiming the exemption under ABRY should give certificate/ declaration

that he has neither claimed employer's share of EPF/EPS contributions nor

received nor shall claim or receive in future under the contract if registered

under ABRY Scheme, has deprived most of the Contractors in participating

in the process who are already registered with the EPF Organization, thereby

resulting in reduction of competition. It is further submitted that the aforesaid

condition has seriously prejudiced the rights and interests of the Petitioner 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 Petitioner, 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

WP(C) No. 1633/2021; CM No. 5466/2021

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

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 NIT 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.

WP(C) No. 1633/2021; CM No. 5466/2021

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;

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:

WP(C) No. 1633/2021; CM No. 5466/2021

"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."

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

WP(C) No. 1633/2021; CM No. 5466/2021

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.

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

WP(C) No. 1633/2021; CM No. 5466/2021

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

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

Petitioner has 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:

WP(C) No. 1633/2021; CM No. 5466/2021

(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

and conditions with respect to the impugned NITs was certainly not irrational

in any manner whatsoever or intended to favour anyone.

11. For the foregoing reasons, 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 20th, 2021 "TAHIR"

                               i.     Whether the Judgment is reportable?                 Yes/ No.
                               ii.    Whether the Judgment is speaking?                   Yes/ No.




TAHIR MANZOOR BHAT
2021.08.20 17:14
I attest to the accuracy and
integrity of this document