Jammu & Kashmir High Court - Srinagar Bench
M/S Creations vs Union Territory Of Jk & Ors on 22 November, 2021
On Board of 22.11.2021
Serial No. 39
2nd Supplementary Cause List
HIGH COURT OF JAMMU & KASHMIR AND LADAKH
AT SRINAGAR
LPA No. 158/2021
CM No. 7665/2021
Dated: 23rd of November, 2021.
M/S Creations, Architects, Engineers, Planners, Interior Designers
... Appellant(s)
Through:
Mr G. A. Lone, Advocate with
Mr S. N. Ratanpuri, Advocate.
Versus
Union Territory of JK & Ors.
... Respondent(s)
Through: -
Mr M. A. Chashoo, AAG.
CORAM:
Hon'ble Mr Justice Ali Mohammad Magrey, Judge
Hon'ble Mr Justice Sanjay Dhar, Judge
(JUDGMENT)
Per Magrey; J (Oral):
01. Impugned in this appeal is Judgment dated 18th of November,
2021 passed by the learned Single Judge in the Writ Petition filed by the
Appellant/ Writ Petitioner bearing WP(C) No. 2343/2021, whereby and
whereunder the Petition of the Appellant/ Writ Petitioner stands dismissed.
02. The material facts leading to the filing of this appeal, as emerge
from the pleadings on record, are that the Appellant/ Petitioner-firm claims to
LPA No. 158/2021; CM No. 7665/2021
be a renowned Architectural-cum-Structural Consultancy, having expertise in
the field. It is stated that in terms of communication No. PS/MD/7983-8005
dated 2nd of March, 2016, the Respondent-JKPCC empaneled as many as 23
Architectural and Structural firms for providing the Consultancy about the
designs and structures, etc., of the buildings intended to be constructed by it,
wherein the Appellant/ Writ Petitioner claims to have figured at Serial No.10.
It is also pleaded that ever since the said empanelment, the Appellant/ Writ
Petitioner provided Consultancy for Designs and Structural works undertaken
by the Government in the erstwhile State of Jammu and Kashmir (now Union
Territory) in regard to series of buildings, although no formal orders for
providing Consultancy were being issued, but, under the agreed arrangement,
a specified percentage calculated on the basis of cost of construction works
was being assessed and paid. It is averred that the process of Consultation by
the Respondent-JKPCC with the Appellant/ Writ Petitioner as regards the
work put to tender by medium of the impugned NIT dated 3rd of November,
2021 was already initiated way back in the year 2018 and that the Appellant/
Writ Petitioner was selected for providing and, accordingly, provided the
Drawing and Structural Consultancy on the basis of his previous performance
and comparative assessment of suitability among the approved Consultants
who were empaneled along with the Appellant/ Writ Petitioner. In these
circumstances, the Appellant/ Writ Petitioner, being aggrieved of the
impugned tender notice, filed Writ Petition bearing WP(C) No. 2343/2021
seeking quashing of the impugned tender notice. Simultaneously, the
Appellant/ Writ Petitioner had also sought a direction in the name of the
LPA No. 158/2021; CM No. 7665/2021
Respondent-JKPCC to continue Consultancy allotted to it in respect of the
construction tendered vide the impugned NIT; as well as to pay the amount
already due towards the Appellant/ Writ Petitioner from the Respondent-
JKPCC. The learned Single Judge, after hearing the Counsel for the parties,
in terms of Judgment dated 18th of November, 2021, dismissed the Petition
filed by the Appellant/ Writ Petitioner as being devoid of any merit. It is this
Judgment of the learned Single Judge that has been assailed by the Appellant/
Writ Petitioner in this appeal on the grounds projected in the memo of appeal.
03. We have heard the learned Counsel for the parties at length;
perused the pleadings on record; and have considered the matter.
04. At the first blush, what requires to be stated, herein this case, 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
put the work required to be completed to tender as per the relevant terms and
conditions so as to best serve its purposes. Whenever a particular work is put
to tender, it might hurt the interests of someone or the other, but, for that
reason, the said tendering process cannot be labelled as malafide or arbitrary.
It needs no repetition that 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
LPA No. 158/2021; CM No. 7665/2021
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 instant case, the decision of the Respondent-JKPCC in putting
the work in question to tender vide 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, upon a bare perusal of the pleadings on record, we did not find
any document/ material which would have shown that the decision made by
the authority to put the work to tender is malafide or intended to favour
someone. Likewise, the third ground of public interest is also not affected in
the present case because by putting the work to tender, the Respondent-
JKPCC has encouraged greater competition which is the essence of the scope
of tendering process meant to favour public interest. The claim of the
Appellant/ Writ Petitioner that since he had already provided Consultancy
services with regard to the work put to tender in terms of the impugned NIT,
as such, the work could not have been subjected to fresh tender cannot hold
ground inasmuch as there is no formal allotment order issued in favour of the
Appellant/ Writ Petitioner in this behalf. The Appellant/ Writ Petitioner has
based his claim on some inter se communications, but no such communication
can be construed as a formal allotment order in favour of the Appellant/ Writ
Petitioner.
LPA No. 158/2021; CM No. 7665/2021
05. The principle of legitimate expectation qua the work in question
cannot be applied in the instant case in view of the fact that the Appellant/
Writ Petitioner has not substantiated the execution of work in tune with the
scheme of law in public largess. Merely because some Officer(s) of the
Respondent-JKPCC, without any authority, may have asked the Appellant/
Writ Petitioner to execute the work does not, in any manner, entitle the
Appellant/ Writ Petitioner to claim any right with regard to application of the
principle of legitimate expectation. This apparent wrong committed by the
Officer(s) concerned of the Respondent-JKPCC in asking the Appellant/ Writ
Petitioner to provide Consultancy services without there being any process
evolved for the same, as provided under law, cannot be allowed to come in
the way of the Respondent-JKPCC to put the work to tender as per law/ rules
governing the field. At the same time, it is also high time that the Respondent-
JKPCC, being a public authority, sets its house in order in making sure that
all the tendering processes involving public interest are initiated and taken to
their logical conclusion as per the law/ rules governing the field and not on
the whims and caprice of any Officer of the Corporation. In that context, the
learned Writ Court has rightly not found favour with the contention of the
Appellant/ Writ Petitioner in regard to the 'Doctrine of Legitimate
Expectation' by holding that the said doctrine is not attracted in the case of
the Appellant/ Writ Petitioner.
06. In a landmark judgment rendered in case titled 'Tata Cellular V.
Union of India: (1994) 6 Supreme Court Cases 651', the Supreme Court at
LPA No. 158/2021; CM No. 7665/2021
Paragraph No.94, while dealing with the matters arising out of tender and
contract, 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 expertise 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."
07. 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
LPA No. 158/2021; CM No. 7665/2021
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."
08. Again, the Supreme Court, in case titled 'Directorate of
Education & Ors. V. Educomp Datamatics Ltd. & 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 joints is a necessary concomitant for
LPA No. 158/2021; CM No. 7665/2021
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.
09. 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, at the same time, 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
LPA No. 158/2021; CM No. 7665/2021
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
Appellant/ Writ Petitioner has not been able to establish before the Court that
the decision taken by the Respondent-JKPCC in putting the work in question
to tender 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 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."
LPA No. 158/2021; CM No. 7665/2021
From a bare perusal of the pleadings placed on record, it is more
than apparent that the decision taken by the Respondent-JKPCC in putting the
subject work to tender in terms of the impugned tender notice was certainly
not irrational in any manner whatsoever or intended to favour anyone. The
claim of the Appellant/ Writ Petitioner, when appreciated in its true and
correct perspective, is that the work in question stated to have been allotted to
him on the directions of some Officer(s) of the Respondent-JKPCC in absence
of any formal allotment order cannot be put to tender and, if the same is
allowed, it would certainly amount to perpetuating the wrongful act done by
the said Officer(s) of the Respondent-JKPCC.
10. For the reasons stated hereinabove, we do not find any illegality
or perversity in the impugned Judgment passed by the learned Single Judge
as would warrant its interference from this Court. Consequently, this appeal
fails and is, accordingly, dismissed, along with the connected CM.
(Sanjay Dhar) (Ali Mohammad Magrey)
Judge Judge
SRINAGAR
November 23rd, 2021
"TAHIR"
i. Whether the Judgment is reportable? Yes/ No.
ii. Whether the Judgment is speaking? Yes/ No.
TAHIR MANZOOR BHAT
2021.11.24 14:39
I attest to the accuracy and
integrity of this document
