Kerala High Court
The Principal Chief Conservator ... vs The Principal Chief Conservator ... on 19 January, 2021
W.A. No. 1568/2020 & batch : 1:
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE THE CHIEF JUSTICE MR.S.MANIKUMAR
&
THE HONOURABLE MR. JUSTICE SHAJI P.CHALY
TUESDAY, THE 19TH DAY OF JANUARY 2021 / 29TH POUSHA, 1942
WA.No.1568 OF 2020
AGAINST THE JUDGMENT DATED 16.11.2020 IN WP(C) 24241/2020(E) OF HIGH
COURT OF KERALA
APPELLANTS/RESPONDENTS 1 TO 4 IN W.P.(C):
1 THE PRINCIPAL CHIEF CONSERVATOR OF FOREST (PLANNING AND
DEVELOPMENT) FOREST HEADQUARTERS,VAZHUTHACAUD,
THIRUVANANTHAPURAM-695 014.
2 THE CHIEF CONSERVATOR OF FORESTS, HIGH RANGE CIRCE,
KOTTAYAM - 695 014.
3 THE CHIEF CONSERVATOR OF FORESTS,
SOTHERN CIRCLE,KOLLAM.
4 THE DIVISIONAL FOREST OFFICER,
KONNI DIVISION ,KONNI,PATHANAMTHITTA-695 001.
BY SRI. SANDESH RAJA, SPL. GOVERNMENT PLEADER
RESPONDENT/PETITIONER & 5TH RESPONDENT IN W.P.(C):
1 SURESH MATHEW, AGED 61 YEARS,
S/O K.M.MATHEW,NEDUMCHIRAYIL HOUSE,
S.H.MOUNT,KOTTAYAM-686 006.
2 M/S.KOTTACKAL TIMBERS,
REPRESENTED BY MANAGING PARTNER,RAJAN MATHEW,
AGED 64, KOTTACKAL HOUSE,ADOOR,
PATHANAMTHITTA-695 001.
R1 BY SRI. M.C.JOHN
THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 19-01-2021, ALONG
WITH WA. NOS. 1577 & 1589 OF 2020, THE COURT ON THE SAME DAY
DELIVERED THE FOLLOWING:
W.A. No. 1568/2020 & batch : 2:
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE THE CHIEF JUSTICE MR.S.MANIKUMAR
&
THE HONOURABLE MR. JUSTICE SHAJI P.CHALY
TUESDAY, THE 19TH DAY OF JANUARY 2021 / 29TH POUSHA, 1942
WA.No.1577 OF 2020
AGAINST THE JUDGMENT DATED 16.11.2020 IN WP(C) 24075/2020(H) OF HIGH
COURT OF KERALA
APPELLANTS/RESPONDENTS 1 TO 3 IN W.P.(C):
1 STATE OF KERALA
REP. BY ADDITIONAL CHIEF SECRETARY TO DEPARTMENT OF
FOREST AND WILDLIFE DEPARTMENT, GOVERNMENT SECRETARIAT,
THIRUVANANTHAPURAM-695 001
2 THE CHIEF CONSERVATOR OF FORESTS,
SOUTHERN CIRCLE, OFFICE OF CCF (SOUTHERN CIRCLE),
CHAMAKADA KOLLAM 691 001
3 DIVISIONAL FOREST OFFICER
DIVISIONAL FOREST OFFICE, KONNI, PATHANAMTHITTA-689 691
BY SRI. SANDESH RAJA, SPL. GOVERNMENT PLEADER
RESPONDENT/PETITIONER & 4TH RESPONDENT IN W.P.(C):
1 M/S KOTTACKAL TIMBERS,
HAVING OFFICE NEAR RELIANCE PUMP, K.P.ROAD, ADOOR REP.BY
ITS MANAGING PARTNER RAJAN MATHEW, AGED 64 YEARS,
S/O.K.V.MATHEW, RESIDING AT KOTTACKAL HOUSE, ADOOR P.O.,
PATHANAMTHITTA-691 523.
2 MR.K.N.SYAM MOHAN LAL
AGE AND FATHER'S NAME NOT KNOWN TO THE PETITIONER,
DIVISIONAL FOREST OFFICER, DIVISIONAL FOREST OFFICE,
W.A. No. 1568/2020 & batch : 3:
KONNI, PATHANAMTHITTA-689 691
R1 BY ADV. SRI.MANU RAMACHANDRAN
R1 BY ADV. SRI.M.KIRANLAL
R1 BY ADV. SRI.T.S.SARATH
R1 BY ADV. SRI.R.RAJESH (VARKALA)
R1 BY ADV. SHRI.SAMEER M NAIR
THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 19-01-2021, ALONG
WITH WA.NOS. 1568 & 1589 OF 2020, THE COURT ON THE SAME DAY
DELIVERED THE FOLLOWING:
W.A. No. 1568/2020 & batch : 4:
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE THE CHIEF JUSTICE MR.S.MANIKUMAR
&
THE HONOURABLE MR. JUSTICE SHAJI P.CHALY
TUESDAY, THE 19TH DAY OF JANUARY 2021 / 29TH POUSHA, 1942
WA.No.1589 OF 2020
AGAINST THE JUDGMENT DATED 16.11.2020 IN WP(C) 22944/2020(P) OF HIGH
COURT OF KERALA
APPELLANTS/RESPONDENTS IN W.P.(C):
1 STATE OF KERALA
REPRESENTED BY ADDITIONAL CHIEF SECRETARY TO DEPARTMENT
OF FOREST AND WILDLIFE DEPARTMENT, GOVERNMENT
SECRETARIAT, THIRUVANANTHAPURAM-695 001.
2 PRINCIPAL CHIEF CONSERVATOR OF FORESTS,
(PLANNING AND DEVELOPMENTS), FOREST HEAD QUARTERS,
VAZHUTHACAUD, THIRUVANANTHAPURAM-695 014.
3 THE CHIEF CONSERVATOR OF FORESTS,
CHAMKADA, KOLLAM, KERALA-691 001.
4 THE DIVISIONAL FOREST OFFICER,
DIVISIONAL FOREST OFFICE, KONNI, PATHANAMTHITTA-689 691.
BY SRI. SANDESH RAJA, SPL. GOVERNMENT PLEADER
RESPONDENT/S:
BOSE THOMAS
PARAPILLY HOUSE, NEELESWARAM P.O., KALADY,
ERNAKULAM-683 574.
THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 19-01-2021, ALONG
WITH WA. NOS. 1568 & 1577 OF 2020, THE COURT ON THE SAME DAY
DELIVERED THE FOLLOWING:
W.A. No. 1568/2020 & batch : 5:
Dated this the 19th day of January, 2021.
JUDGMENT
W.A. Nos. 1568, 1577 & 1589 of 2020]
SHAJI P. CHALY, J.
The above appeals are filed by the Chief Conservator of Forests
and the other forest officials challenging the common judgment of the
learned single Judge dated 16.11.2020 in W.P.(C) Nos. 24241, 24075,
and 22944 of 2020, whereby the learned single Judge allowed the writ
petitions and held that cancellation of earlier tender and the action of
retendering the same work again is illegal and uncalled for, and
accordingly the order dated 12.10.2020 and re-tender notification
dated 31.10.2020 were set aside and it was further declared that the
petitioners in W.P.(C) Nos. 24075 and 24241 of 2020, who have been
granted renewal of licence, should be treated as qualified to participate
in the earlier tender pursuant to the renewal of their A class licence.
Consequently, the appellants were directed to proceed with the e-
tender dated 25.05.2020 and award the work to the eligible tenderer
at the earliest. It is, thus, challenging the legality and correctness of
the said judgment, the appeals are filed.
2. Brief material facts for the disposal of the appeals are as
follows:
The Divisional Forest Officer, Konni issued an order dated
12.10.2020 cancelling an earlier e-tender notification dated
25.05.2020 for final tree felling works of 1954 Nellidappara in South
Kumaramperoor Forest Station under Konni Range in Konni Forest
Division and decided to float a tender afresh. The writ petitioners were
participants in the earlier e-tender notification dated 25.05.2020 and
according to them, the action of the appellants' to retender the work
after cancelling the earlier tender was an arbitrary and illegal action.
In fact, the Principal Conservator of Forests issued a circular dated
29.02.2020 in regard to the renewal of registration of A class
contractors, wherein it was stipulated that A class registered
contractors, who have not participated in any of the tenders notified by
the Department for timber extraction during the last financial year, are
not eligible to get renewal of the A class registration.
3. On the basis of the said circular, the registration of the
petitioners in W.P.(C) Nos. 24075 and 24241 of 2020 were not
renewed. However, the appellants have floated the e-tender dated
25.05.2020 for the work in question. The said petitioners, being
aggrieved by the said action, have approached this Court by filing W.P.
(C) Nos. 11854 and 12389 of 2020 respectively challenging the
aforesaid circular dated 29.02.2020, in which interim directions were
sought to permit them to participate in the e-tender dated
25.05.2020. A learned single Judge of this Court granted interim
orders permitting the said petitioners to participate in the tender
proceedings provisionally. To put it short, as per common judgment
dated 28.09.2020, the said writ petitions were finally allowed setting
aside the impugned orders declining renewal of registration of the
petitioners and directing the authority to reconsider their applications
for renewal of registration on merits dehors the circular dated
29.02.2020. Anyhow, the Divisional Forest Officer cancelled the e-
tender dated 25.05.2020 as per an order dated 12.10.2020 and
floated fresh tenders for the same work on 31.10.2020. It is, thus,
challenging the said orders, the writ petitions were filed.
4. The basic contentions raised by the writ petitioners were that
the cancellation of e-tender dated 25.05.2020 was arbitrary and
unreasonable, that the order dated 12.10.2020 was passed without
any bona fides and with mala fide intentions or under the instructions
of higher officials of the Forest Department. It was also submitted that
the act of cancelling the e-tender immediately after the judgment with
regard to the renewal of registration of the two writ petitioners would
show that the intentions of the Department officials are unfair.
According to the writ petitioners, no proper and genuine reasons were
shown in the cancellation order and even though it is stated that
complaints were made by other persons expressing their inability to
participate in the e-tender, there were no such complaints filed by any
affected persons. It was also contended that the reasons assigned in
the cancellation order dated 12.10.2020 are all a ruse to cancel the
earlier tender with mala fide intentions and therefore arbitrary.
5. The learned single Judge, taking into account the rival
submissions and various facts and figures, was of the firm opinion that
the reasons assigned by the Divisional Forest Officer in the cancellation
order are not sustainable in law and therefore, the same is liable to be
interfered with. In order to have a proper appreciation of the issues
raised in the appeals, the observations, findings and conclusions in the
impugned common judgment would be relevant and they are as
follows:
10. When the earlier tender proceedings were pending, the petitioners
in W.P.(C) Nos.24075/2020 and 24241/2020 filed W.P.(C)
Nos.11854/2020 and 12389/2020 respectively seeking inter alia to
permit them also to participate in the tender proceedings, since the
rejection of their application for renewal of registration was illegal.
Finding prima facie case in the writ petitions, this Court passed
interim orders directing the respondents to permit the petitioners also
to participate in the tender proceedings. This Court ultimately found
that rejection of their applications for renewal of registration, is
illegal. It is when the applications of the petitioners were being
processed for grant of renewal of licence pursuant to the orders of this
Court, that the DFO has cancelled the earlier e-tender.
11. One of the reasons given by the DFO for cancelling the e-tender is
that some other contractors had complained that they could not
participate in the tender due to Covid 19 transportation restrictions.
This ground appears to be incorrect and unsustainable. Firstly, in the
earlier round of litigations wherein the tender in respect of the work
was involved, the respondents had no case that there are complaints
from contractors, of any denial of opportunity to participate. Secondly,
the tendering process adopted earlier also was e-tender and therefore
transportation restrictions if any consequent to Covid 19, cannot affect
the tender proceedings.
12. Another reason stated by the DFO for cancellation of the earlier
tender proceedings, is that final felling of mature teak plantation and
its re-planting work are time bound operations. Once there is delay, it
would affect establishment of new plantation. One fails to understand
as to how a re-tendering process abandoning the existing tender
process, would expedite the re-planting work. If anything, it would
cause only further delay.
13. The DFO has further stated that the model code of conduct with
respect to elections to Local Self Government Institutions is
impending and hence tender procedure has to be in place at the
earliest. When already the tender proceedings were in place, the DFO
ought not have cancelled the same without concrete reasons,
ostensibly to beat the model code of conduct.
14. Another reason extended by the DFO is that since a good number
of cases were filed among the participating contractors, at present
there is an atmosphere of healthy competition among them, which
would be beneficial to the Government in the recent proceedings. This
reasoning is hypothetical and unacceptable in the facts of this case.
15. This Court in the earlier round of litigations, directed the
respondents to consider the tenders of the petitioners in W.P.(C)
Nos.24075/2020 and 24241/2020, provisionally and held that rejection
of their applications for renewal of licence is illegal. The petitioners
approached this Court to establish their right to participate in the
tendering process for the work in question. The writ petitions ended in
their favour. It is now conceded that petitioners have been granted
renewal of A class registration subsequently.
16. Going by the impugned order dated 12.10.2020, it is seen that in
the tender proceedings which are cancelled by the order impugned
herein, the lowest tenderer has quoted an amount 12.67% below the
estimated rate, which should be treated as a reasonably good offer for
the respondents. There is no guarantee that in the re-tendering process,
tenderers would quote lesser amounts.
17. There were sufficient participants in the earlier tender
proceedings. There is nothing on record to show that there have been
any serious complaints regarding the e-tender proceedings initiated
earlier. In the earlier tender proceedings, offers have been received to
do the work at rates lesser than the estimated rate. Even according to
the tendering authority, expeditious implementation of the project is
imperative.
18. In the circumstances of the case, this Court is of the opinion that
cancellation of earlier tender and the action of re-tendering the same
work again, is illegal and uncalled for. The impugned order dated
12.10.2020 and re-tender notification dated 31.10.2020 are therefore
set aside. It is declared that the petitioners in W.P.(C) Nos. 24075/2020
and 24241/2020 who have been granted renewal of license should be
treated as qualified to participate in the earlier tender pursuant to the
renewal of their A Class license. The respondents are directed to
proceed with the e-tender dated 25.05.2020 and award the work to the
eligible tenderer, at the earliest."
6. We have heard the learned Special Government Pleader for
the Forest Sri. Sandesh Raja and the learned counsel for the
respondents/writ petitioners Sri. M.C. John, Sri. Manu Ramachandran
and other learned counsel appeared for the respondents, and perused
the pleadings and materials on record.
7. The paramount common contentions raised by the appellants
are that the judgment of the learned single Judge interfering with the
order of cancellation is illegal and against the settled principles of law,
that the finding of the learned single Judge that the complaint of the
contractors that they could not participate in the e-tender due to
transportation restrictions on the basis of the pandemic Covid-19
protocol cannot be a reasonable ground, as the same was not raised in
the earlier writ petitions, is incorrect and against the facts on record.
According to the appellants, the earlier writ petitions were filed
specifically challenging the rejection orders issued by the Chief
Conservator of Forests rejecting the registration of the petitioners as A
class contractors and the cancellation of the e-tender was never a
subject matter in the earlier writ petitions and therefore, the said
finding rendered has no legal or factual basis.
8. That apart, it was contended that in accordance with the
terms and conditions of the notice inviting tender, a bidder apart from
submitting his e-tender has to submit a tender as well the documents
by speed post or registered post simultaneously within the time
stipulated in the notice inviting tender and due to the pandemic Covid
19 , many could not have done the same. It was also submitted by the
learned Special Government Pleader that the contention that the
finding in the impugned cancellation order is hypothetical is not at all
true or correct, since sufficient reasons are assigned in the impugned
order. It was also submitted that the learned single Judge was
incorrect in substituting the reasons provided by the competent
authorities while undertaking a judicial review exercising the powers
under Article 226 of the Constitution of India. Other findings in the
judgment as extracted above are also challenged in the appeal and
have further relied upon the judgment of the Apex Court in Michigan
Rubber (India) Ltd. (M/s) v. State of Karnataka and others
(2012) 8 SCC 216], wherein it was held that interference by court in
contract matters is not justifiable, unless action of tendering authority
is mala fide, arbitrary or unreasonable. It was submitted that none of
the requirements which are well settled in law for interference in
contractual matters, like arbitrariness, illegality, unreasonableness,
misuse of statutory powers etc. were established by the writ
petitioners so as to justify interference of the writ court. Therefore, the
sum and substance of the submissions were that merely because the
writ court felt that no reasons are assigned in the order impugned,
that will not amount to the legal requirements justifying interference
with the floating of the tender after cancellation of the earlier one on
31.10.2020.
9. The learned Special Government Pleader has also submitted
that since the tender was earlier invited during the peak period of the
pandemic Covid- 19, other eligible contractors could not participate in
the contract. The learned Special Government Pleader has further
invited our attention to the judgment of the Apex Court in Jagadish
Mandal v. State of Orissa and others [(2007) 14 SCC 517].
10. On the other hand, the respective counsel appearing for the
writ petitioners, have taken us through the cancellation order dated
12.10.2020 and submitted that even though it is stated in the
cancellation order that some other contractors had complained that
they could not participate in the e-tender due to the pandemic Covid-
19 transportation restrictions, neither in the cancellation order nor in
the writ appeal, documents are produced to substantiate the same,
and according to the learned counsel, there were no such complaints
from any contractors. It was also pointed out that apart from one of
the participants in the tender, all were from different places within the
State of Kerala and they could successfully participate in the e-tender
dated 25.05.2020 and had complied with all the mandatory
requirements stipulated in the notice inviting tender including postal
transmission of records, and therefore such a reason shown in the
cancellation order is without any factual and legal foundation and
intended to help some other contractors.
11. It was also submitted that there is no specific case for the
appellants that any other persons, other than the 5 participants in the
e-tender dated 25.05.2020, have submitted e-tender, but disabled
them to submit the tender documents before the tender inviting
authorities in contemplation of the requirements of notice inviting
tender. Therefore, according to the writ petitioners, such a reason is
shown only to cancel the tender, which itself is a highly doubtful
circumstance with respect to the conduct of the appellants and, which,
in turn, would be an arbitrary exercise of power. Learned counsel have
also addressed arguments supporting the findings in the Judgment
impugned. We have evaluated the rival submissions made across the
Bar.
12. The subject issue revolves around the order of cancellation
dated 12.10.2020, wherein it is clearly specified that there were only 5
participants in the e-tender dated 25.05.2020. The tender was
opened, and the tenderer namely, Kottakkal Timbers, one of the writ
petitioners, was the lowest bidder with 12.67% below the estimated
rate of contract. The other two writ petitioners, namely Suresh Mathew
and Bose Thomas, have quoted 8.90% and 14.20% above the
estimate rate. It is also stated in the said order that as on the date of
submission of the tender, M/s. Kottakkal Timbers, the lowest bidder,
Sri. Suresh Mathew, the second lowest bidder and Sri. Bose Thomas,
the third lowest bidder, were not having valid registrations, and it was
not sure whether the renewing authority will decide to renew the
licence. Anyhow, during the pendency of the writ petitions, the licences
were renewed and the bid submitted by the said writ petitioners were
processed on the basis of the directions issued by this Court to do so.
It is also clear from the order that the tender inviting authority was
satisfied that the registration of the lowest tenderer and second lowest
tenderer were likely to be renewed by the competent authority and he
was also of the opinion that it was against the principles of natural
justice to refuse their bids on the presumptive ground that they were
not eligible on the date of submission of the tenders. The reasons
assigned in the impugned cancellation order was analysed by the
learned single Judge in the said backdrop and it was, accordingly,
found that the reasons assigned cannot be sustained. The reasons
assigned in the order of cancellation are as follows:
"3. Some other contractors had complained that they could not
participate in the e-tender due to Covid-19 transportation
restrictions. Their grievances need proper redressal.
4. Final felling of a mature Teak Plantation and its replanting are
time-bound silvicultural operations which once delayed affects
establishment of the new plantation. Thus the works should
commence soon.
5. The Model Code of Conduct (MCO) with respect to the election
to Local Self Government is impending. Hence tender procedure, if
any, has to be placed at the earliest.
6.Since a good number of cases were filed among the participated
contractors, at present there is an atmosphere of healthy competition
among them which is expected to be beneficiał for safeguarding
Government interest and the lowest bid in all likelihood is expected
to come down further if re-tendered.
7. The plantation is in an easy terrain of manageable extent and
hence there could be better participation and healthy competition if
re-tendered.
8. As per Go (Rt) No. 394/2018/For, dated 01.09.2018, the
Government order dealing with the financial delegation of powers,
the Divisional Forest Officer can accord sanction for tender excess
upto 10% above the estimate rate.
9 As per clause 3 of the e-tender notice in English the bidding
authority reserves the right to modify/cancel, any/all bids without
assigning any reason. Clause 27 of e-Government procurement
notice inviting tender for works puts in explicit terms that the tender
inviting authority or other sanctioning astoxity reserves the right to
reject any tender or all the tenders without assigning any reason
therefor."
13. In our considered opinion, on an analysis of the findings
made by the learned single Judge, we see that even though the
expressions 'arbitrary' and 'unreasonable' are not employed by the
learned single Judge in the judgment, it is clear that it was after
entering into the requisite findings leading to arbitrariness, the writ
petitions were allowed and the impugned cancellation order was
quashed. We also find force in the argument advanced by the learned
counsel for the writ petitioners that one of the reasons shown in the
cancellation order that there were complaints from eligible contractors
on their failure to participate in the e-tender is a baseless contention,
since it was an e-tender. In order to substantiate the said contention,
there should have been participation in the e-tendering process by any
other eligible contractors.
14. We also do not find any basis in the arguments of the
learned Special Government Pleader that the bid documents had to be
submitted physically, in view of the stipulation contained in the notice
inviting tender, and it was not possible due Covid 19 restrictions, for
the reason that such a requirement arises only if any eligible
contractor participated in the e-tendering process. In order to establish
as to whether any eligible contractor participated in the e-tender, no
documents were produced, and if such a situation had arisen, there
would have been substantive documents available with the tender
inviting authority and having not produced any such evidence, it can
only be legally presumed that there were no such incident to support
the stand adopted by the appellants. Therefore, we are of the clear
opinion that the fundamental reason assigned in the cancellation order
that there were complaints from the eligible contractors expressing
their inability to participate in the e-tender, has no factual and legal
foundation and cannot be sustained under law, and thus it can only be
termed as an arbitrary and illegal act. If there is no conclusive proof
for participation of any other eligible contractors in the e-tendering
process, the contention advanced by the appellants that many
contractors could not participate due to restriction in transportation
facilities is a hollow and baseless argument. Which thus means,
without submitting e-tender, nobody can submit the tender documents
physically before the tender inviting authorities, which is quite clear
and evident from the notice inviting tender, which specifies that the
tender documents should reach the Department on or before the bid
opening time and date, failing which the bid is liable to be rejected.
Therefore, Such a requirement can only be understood as an
additional requirement to the submission of the e-tender by the willing
and eligible contractors.
15. Circumstances being so, the prime reason assigned for the
cancellation of contract as extracted above becomes an arbitrary,
unreasonable and illegal act on the part of the tender inviting
authority. Merely because there is a likelihood of the rates being
lowered, if successive tenders are invited, it cannot be a justifiable
ground at all for cancellation of the contract, since we are of the firm
opinion that, if that is to be taken as a valid reason, then there would
not be any end to the tender inviting procedure. We also find from the
judgment that it was on the basis of the urgency put forth by the
appellants alone, the writ petitions were heard even without the filing
of any statement or counter by the appellants, for the reason that the
work as per e-tender is to be carried out on an emergent basis. If that
be so, we are at a loss to understand as to how the situation of
emergency pointed out by the appellants could be achieved by
cancelling the e-tender and inviting fresh tenders, which in our
opinion, undoubtedly protracts and retards and elongates the
finalisation of the proceedings to a future date. To put it otherwise the
reason so assigned is not at all a conducive and compatible one to
justify the said reasoning of the tender inviting authority in the order
impugned. Even though the learned Special Government Pleader has
invited our attention to paragraph 19 of the judgment of the Apex
Court in Jagadish Mandal (supra), we have no difference of opinion
to the principles of law laid down by the Apex Court after conducting a
survey of the earlier decisions on the point. For the sake of
convenience and understanding the true import of the judgment, it is
profitable to extract paragraph 22 of Jagadish Mandal (supra) and it
reads thus:
"22. Judicial review of administrative action is intended to prevent
arbitrariness, irrationality, unreasonableness, bias and mala fides. Its
purpose is to check whether choice or decision is made "lawfully" and
not to check whether choice or decision is "sound". When the power
of judicial review is invoked in matters relating to tenders or award of
contracts, certain special features should be borne in mind. 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.
If the answers are in the negative, there should be no interference
under Article 226. Cases involving blacklisting or imposition of penal
consequences on a tenderer/contractor or distribution of State largesse
(allotment of sites/shops, grant of licences, dealerships and franchises)
stand on a different footing as they may require a higher degree of
fairness in action."
So also is the case with Michigan Rubber (India) (supra) relied
upon by the appellants.
16. But, to the facts and circumstances involved in the appeals
at hand, according to us, the said principles cannot be employed to
nonsuit the writ petitioners. Moreover, the facts and circumstances
involved in Jagdish Mandal were entirely different in regard to a
defective tender submitted by a participant and therefore, the
principles laid down on the basis of such circumstances cannot be
imported to have application to the facts and circumstances involved in
the appeals at hand. So also, it is a very well settled proposition in law
that the principles of law evolved by the superior courts can only be
applied appropriately in a given circumstances, taking into account the
facts and circumstances involved in the case.
17. We have no doubt in our mind that in a writ petition seeking
judicial review, certain restraints have to be followed by the court,
bearing in mind the public interest, the commercial functions of the
Government, the feasibility of the contract and the viability etc.
However, we cannot forget the fact that if there is any patent
arbitrariness in the matter of cancellation of a contract and that too
after opening the bids submitted by the participants, a writ court shall
step in to undo such arbitrariness and unreasonableness. That said,
evaluating the principles of law laid down by the Apex Court in the
judgments referred to supra, it is clear that the basic requirement of
Article 14 of the Constitution of India is fairness in action by the State,
non-arbitrariness in essence, and the substance is the heartbeat of fair
play. It is also clear from the preposition of law laid down by the Apex
Court that the attempt of a writ court in a contractual matter should
only be to decipher as to whether the State has acted validly for a
discernible reason and not whimsically for any ulterior purpose.
Thinking so, we are in respectful agreement with the findings of the
learned Single Judge on all counts.
18. On a consideration of the facts, law discussed above, the
circumstances involved in the appeals at hand and the findings
rendered by the learned single Judge, we have no hesitation to hold
that the appeals are devoid of merits and the learned single Judge has
exercised the discretion conferred under Article 226 of the Constitution
of India properly, eloquently and in accordance with law.
Upshot of the above discussion is that writ appeals fail and
accordingly they are dismissed.
S. MANIKUMAR,
CHIEF JUSTICE.
SHAJI P. CHALY,
JUDGE.
Rv
