Firdous Kamran Shora vs Union Of India & Ors
2021 Latest Caselaw 1159 j&K/2

      HIGH COURT OF JAMMU & KASHMIR AND LADAKH
                     AT SRINAGAR

                        WP(C) No. 1330/2021 c/w
                         CCP(S) No. 356/2021

                                                      Dated: 24th of September, 2021.


Firdous Kamran Shora
                                                              ... Petitioner(s)
                               Through:
                   Mr A. H. Naik, Senior Advocate with
                     Mr Tawheed Ahmad, Advocate.

                                  Versus

Union of India & Ors.
                                                            ... Respondent(s)

Through: -

Mr Tahir Majid Shamsi, ASGI for R-1; and Mr N. A. Beig, Senior Advocate with Mr Sofi Manzoor, Advocate for R-2 & 3.

CORAM:

Hon'ble Mr Justice Ali Mohammad Magrey, Judge.

(JUDGMENT)

01. In the instant Petition, the Petitioner is aggrieved of Notice No.

6 (6) 58 EE/DIV/SGR/350 dated 5th of July, 2021 as well as the impugned

tender Notice bearing NIT No.12/EE/DIV/SGR/2021-22 dated 7th of July,

2021 issued by the Respondent No.3.

02. Mr A. H. Naik, the learned Senior Counsel representing the

Petitioner, submitted that the action and inaction on the part of the

Respondents in determining the contract between the parties and changing the

site, that too, without negotiating with the Petitioner amounts to arbitrary

exercise of power, aimed at giving undue benefit to some other blue-eyed

WP(C) No. 1330/2021 c/w CCP(S) No. 356/2021

contractor(s). It is submitted that there was no agreement executed between

the parties, therefore, there was no question of invoking any clause of the

agreement which was not in existence.

03. Objections stand filed on behalf of Respondents 2 and 3. It is

stated that the BSNL, Civil wing, was assigned the responsibility of execution

of NFS project by the Department of Telecommunication (Government of

India). The Project, as stated, is meant for enhancing the communication

system of the Army and is of national importance as the project site is located

at a highly sensitive strategic area of LOC. It is pleaded that the Petitioner was

awarded the contract for timely execution, but he, despite repeated reminders,

did not execute the same on time, constraining the Respondents to take the

impugned action against the Petitioner and re-tender the work, therefore, no

interference is warranted in the said process from this Court.

04. Heard the learned counsel for the parties, perused the pleadings

on record and considered the matter. I have also gone through the relevant

records made available by the learned Senior Counsel representing the

Respondents 2 and 3.

05. At the very outset, what requires to be stated is 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

WP(C) No. 1330/2021 c/w CCP(S) No. 356/2021

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, when

the Petitioner-firm did not fulfil all the terms and conditions prescribed by the

Respondents with regard to completion of the project on time, despite repeated

reminders, in such eventuality, the decision of the Respondents in issuing the

impugned communication and putting the work to fresh tender 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.

In fact, the decision of the Respondents was the result of non-completion of

the Contract on time on part of the Petitioner, more so when the entire project

was located at a highly sensitive and strategic area of LOC. 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. 1330/2021 c/w CCP(S) No. 356/2021

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 Petitions, 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. 1330/2021 c/w CCP(S) No. 356/2021

"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

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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. 1330/2021 c/w CCP(S) No. 356/2021

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 putting the works in question to fresh tenders 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:

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(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 as well as

after going through the relevant records placed before the Court by the

Respondents, it is more than apparent that the decision taken by the

Respondents in putting the work in question to fresh tenders was certainly not

irrational in any manner whatsoever or intended to favour anyone. This

decision, apart from being lawful and sound, appears to have been taken by

the Respondents in view of non-acceptance of all the terms and conditions of

contract on part of the Petitioner.

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.

Interim direction(s), if any, subsisting as on date, shall stand vacated.

12. Pending miscellaneous applications, if any, shall also stand

disposed of, accordingly.

13. No order as to costs.

WP(C) No. 1330/2021 c/w CCP(S) No. 356/2021

14. The relevant record as produced by Mr Beig, the learned Senior

Counsel representing the Respondents 2 and 3, is returned to him in the open

Court.

CCP(S) No. 356/2021:

15. This Contempt Petition is filed alleging violation of ad-interim

Order dated 14th of July, 2021 passed in WP(C) No. 1330/2021.

16. In view of the dismissal of the Writ Petition wherein the interim

Order was passed, as above, the Contempt Petition has turned infructuous

which shall stand closed as such.

17. Registry to place a copy of this Judgment on each file.

(Ali Mohammad Magrey) Judge SRINAGAR September 24th, 2021 "TAHIR"

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




TAHIR MANZOOR BHAT
2021.09.24 12:50
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integrity of this document