Jammu & Kashmir High Court

Danish Yousaf Hajam And vs Ut Of J&K And Others on 10 September, 2021

      THE HIGH COURT OF JAMMU & KASHMIR AND LADAKH
                         AT JAMMU

                                             WP(C) No. 112/2021
                                             CM No. 933/2021
                                             CM No. 506/2021
                                             c/w
                                             WP(C) No. 277/2021
                                             CM Nos. 1404/2021,
                                             1403/2021, 1405/2021,
                                             4661/2021 & 4662/2021
                                             WP(C) No. 467/2021
                                             CM No. 2286/2021

                                             Pronounced on :10th.09.2021

Danish Yousaf Hajam and                        .... Petitioner/Appellant(s)
others

                                  Through:- Mr. Bhat Fayaz, Advocate

                            V/s

UT of J&K and others                                   .....Respondent(s)

                                  Through:- Mr. H. A Siddiqui, Sr. AAG


CORAM : HON'BLE MRS. JUSTICE SINDHU SHARMA, JUDGE

                                   JUDGMENT

01. The Department of Food, Civil Supplies & Consumer Affairs,

Union Territory of J&K, invited online tenders from reputed and

registered transport firms/companies/carriage contractors for

transportation of food grains and sugar of the FC&CSA in the Districts of

Ramban, Udhampur and Kishtwar.

02. The tender notice for Ramban District issued vide e-NIT No.

02/Ramb/FC&CSA/20-21 dated 12.01.2021 has been challenged by the

petitioners in WP(C) No. 112 of 2021; the tender notice for Kishtwar

District issued vide Tender Notice No. e-NIT /ADFCSCA/Kishtwar/02 of

2020-21 dated 01.02.2021 has been assailed in WP(C) No. 277/2021; and

277/2021 & 467/2021

tender notice for Udhampur District issued vide Tender Notice No. e-

NIT/ADFCSCA/Udh 02 of 2020-21 dated 23.01.2021 has been

challenged by the petitioners in WP(C) No. 467/2021.

03. In all the three petitions, identical pleadings have been made for

challenging the e-tenders and vide interim orders dated 29.01.2021,

19.02.2021 & 10.03.2021 passed in these petitions, the finalization of the

tendering process for door step distribution of food grains was stayed by

this Court.

04. The petitioners in all these petitions have questioned the e-NITs

on almost identical grounds that; (i) these online tendering processes have

excluded the petitioners who are Markbans/Ponywallas and, thus,

deprived them of their right to life and livelihood which is in violation of

Article 21 of the Constitution of India; (ii) the petitioners do not have

adequate financial resources and cannot fulfill strict terms of eligibility to

participate in the tendering processes, as such, have excluded them from

transportation process. The respondents should have reserved from part of

the transport operation for them to enable them to earn their livelihood;

(iii) the new contract policy would enable the selected

agencies/Contractors to charge commission from the petitioners on the

higher rates from giving them carriage work and would result in adverse

financial impact on the earning of the petitioners. This also would create

monopoly with the selected Contractors, therefore, the same requires to be

quashed; (iv) the lifting of ration through carriage contractors will deprive

them from their source of livelihood and respondents should only

continue to allow them to lift the ration through Government agencies.

277/2021 & 467/2021

05. Mr. H. A Siddiqui, learned Sr. AAG has objected to the

maintainability of this petition as the petitioners have no locus standi to

file this writ petition as they are not party in the contract with the

Government nor they are participating in the contract. It is submitted that

the petitioners may have been engaged by the fair price dealers to carry

food grains. These arrangements between them are not binding on the

respondents, therefore, these writ petitions deserves to be dismissed.

06. It is further stated that the tenders have been issued in

compliance to the Section 24 of the National Food Security Act, 2013,

which casts an obligation upon the State Government to take delivery of

food grains at the doorstep of designated Fair Price Shops with a view to

comply the provisions of law and to channelize the supply of ration in the

Union Territory. The Union Territory can seek release of central

assistance for intra state movement and handling of food grains only if the

provisions of Section 24(2) are complied. The respondents due to the

interim directions, cannot finalize the contract and are unable to claim the

release of central assistance due to them.

07. Heard learned counsel for the parties.

08. All the online notices inviting tenders issued by the respondents

clearly reflect that the same have been invited for the carriage of food

grains from designated food stores to the Fair Price Shops depots. The

prevalent practice earlier was that the Fair Price Shops dealers were

themselves lifting food grains from godown and were engaging Markbans

and Ponywallas for transportation to areas where there is no motorable

road. The Parliament enacted the National Food Security Act, 2013 and

the food supply operation in the entire country is now being regulated by

277/2021 & 467/2021

the same. As per the National Food Security Act, 2013, it has become the

focus of the State to provide food security that is availability of sufficient

food grains to make the domestic demand as well as access at the

individual level to adequate quantities of food at affordable prices. In

order to address this issue of food security at the household level, the

respondents are implementing the Targeted Public Distribution System

under which subsidized food grains are provided to the Below Poverty

Line, including Antyodaya Anna Yojana, and Above Poverty Line

households. With a view to achieve these, objects the central and the State

Government in terms of Section 12 of the National Food Security Act,

2013 made endeavour to take reforms in the Targeted Public

Distribution System and this includes door steps delivery of food grains to

targeted Public Distribution outlets by lifting from FCI/State godowns and

delivery to Fair Price Shops.

09. In terms of Section 24 of the National Food Security Act, 2013,

the statutory obligations were caused upon the respondents for door step

delivery of food grains from the designated depot and organize intra state

allocation for delivery of the allocated food grains through their

authorized agencies at door step of each Fair Price Shop. The respondents

have also placed on record the communications dated 21.10.2020 and

12.01.2021 of the Ministry of Consumer Affairs, Food and Public

Distribution stating that those States/UTs which do not comply the

provisions of Section 24 of National Food Security Act, 2013 shall not be

given Central share of carriage charges from March, 2021 onwards. This

shall cause serious financial losses to the UTs and adversely affect the

food distribution system.

277/2021 & 467/2021

10. In compliance to provisions of Section 24(2)(a) of the National

Food Security Act, 2013 and in compliance to the directions issued by the

Government of India vide letters dated 21.10.2020 and 12.01.2021, the

tendering process has been issued so that the provisions of the National

Food Security Act, 2013 be implemented and delivery of food grains in

far flung areas is ensured through authorized agencies for the people

living in hilly and tribal areas. The tender document provides for the

transportation of food grains in far flung areas through Ponies. Clause

F(h) of the eligibility criteria of the tender document lays down as under:

"(h) Every participating bidder must have a minimum fleet of a mix (big and small ) commercial vehicles which may be needed for reaching on to shops via state/PMGSY roads and also adequate no. of ponies/Mules for supplying ration to the FPS, where there is no road connectivity. Certified hard copies of all the relevant documents of the vehicles as power the motor vehicle Act/list of the vehicles duly vetted by the competent Transport Authority/RTO/ARTO/ or Affidavit as the case may be shall have to submit at the time of submission of Technical bid."

11. The financial bid also prescribes the administrative freight rates

which are given as under:

S.No. Mode of transport Rate Fixed/Upper Ceiling 1 By mechanical mode

1.a Pucca road Rs. 6.50 per KM per Qtl

1.b Fair Weather/Kuchha road Rs. 11.00 per KM per Qtl

1.c Town upto 5 KM Rs. 25.00 per Qtl

2. Via Headload/Ponies Rs. 35.00 per KM per Qtl

12. The respondents are fulfilling their responsibility of taking the

delivery of food grains from designated depots to doorsteps delivery of

the food grains to Targeted Public Delivery system. The Contractors in all

these cases would be accountable for effective delivery of food grains at

277/2021 & 467/2021

doorstep at minimum price on the rate fixed by the Deputy Commissioner.

The supply of food grains in hilly areas where there is no traffic

possibility, food grains can be carried only through Ponies, the

respondents have fixed the clause of delivery via headload/Ponies in the

conditions of contract. Keeping in view the objectives of the Act and the

requirement of people living in remote hilly and tribal areas there, tenders

have been issued for doorstep delivery of food grains. As per Section

24(3), it is the responsibility of the State to take delivery of food grains

from the designated depots of the central government in the state at the

prices specified in Schedule-I for the persons belonging to the eligible

household and ensure actual delivery of entitled benefits as specified in

the aforesaid sections including doorstep delivery of food grains.

13. It is settled law that unless the process adopted by the decision

making authority in contractual matters is to be malafide, irrational or

affecting public interest, the same cannot be questioned. On examination

of the tender conditions, it cannot be said that the same are in violation of

Article 14 of the Constitution of India or have encroached upon the rights

of the petitioners. The tender conditions have formulated keeping into

account the public interest and providing food grains at door step delivery,

therefore, the endeavor is to allot the carriage contract to those who can

provide the contract service, thus, the notice inviting tender is a

commercial transaction and unless the same is found to be arbitrary or

misusing of the statutory powers, it cannot be interfered. It is in the larger

public interest to continue with the same as the respondents are being

deprived of its central share of carriage charges as they are unable to

comply with the provisions of National Food Security Act, 2013.

277/2021 & 467/2021

14. The Hon'ble Supreme Court while considering a similar proposition in Raunaq International Ltd. Vs. I.V.R. Construction Ltd. & others, (1999) 1 SCC 492, has held as under:

"The award of a contract, whether it is by a 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. These would be :(1) The price at which the other side is willing to do the work; (2) Whether the goods or services offered are of the requisite specifications; (3) Whether the person tendering has the ability to deliver the goods or services as per specifications. When large works contracts involving engagement of substantial manpower or requiring specific skills are to be offered, the financial ability of the tenderer to fulfil the requirements of the job is also important; (4) the ability of the tenderer to deliver goods or services or to do the work of the requisite standard and quality; (5) past experience of the tenderer, and whether he has successfully completed similar work earlier; (6) time which will be taken to deliver the goods or services; and often (7) the ability of the tenderer to take follow up action, rectify defects or to give post contract services. Even when the State or a public body enters into a commercial transaction, considerations which would prevail in its decision to award the contract to a given party would be the same. However, because the State or a public body or an agency of the State enters into such a contract, there could be, in a given case, an element of public law or public interest involved even in such a commercial transaction.

15. In 'Jagdish Mandal V. State of Orissa and others' (2007) 14

SCC 517, Hon'ble the Supreme Court has laid down the following tests

277/2021 & 467/2021

for judicial interference in exercise of power of judicial review of

administrative action:

"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 interferences, 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.

277/2021 & 467/2021

If the answers are in the negative, there should be no interference under Article 226......"

16. It is not the case of the petitioners that earlier they intend to

participate or had participated in any of the contract, as it appears that

they were being engaged by Fair Price Dealers to lift the supply. Though

an apprehension has been expressed that monopoly will be created to the

prejudice of the petitioners but there is no basis for the same as the mode

of transport covers pucca, kacha mechanical town and also provides for

those areas where no road connectivity is there and the ration will have to

travel via Ponies. The petitioners in any case are not being deprived of

their livelihood by lifting ration by carriage contractors as their services

will be required as is already being done by the successful contractors to

fulfill these contracts.

17. Considering the submission of the petitioners and in view of the

law laid down by Hon'ble the Supreme Court, public interest would be

severely jeopardized if the respondents are not allowed to finalize the

contract and proceed further in e-NITs for allotment of contract for

transportation of food grains and sugar of FC&CSA in the Districts of

Ramban, Udhampur and Kishtwar.