Madhya Pradesh High Court
Mohammad Sultan Khan vs Union Of India Department Of Posts ... on 22 July, 2021
Author: Sujoy Paul
1 WP No.17290/20 & 18637/20
The High Court of Madhya Pradesh Bench at Indore
Case Number W.P.No. 17290/2020
Parties Name Mohammad Sultan Khan
Vs.
Union of India & Ors.
Case Number W.P.No. 18637/2020
Parties Name Mohammad Sultan Khan
Vs.
Union of India & Ors.
Date of Order 22/07/2021
Bench Division Bench:
Justice Sujoy Paul
Justice Anil Verma
Judgment delivered Justice Sujoy Paul
by
Whether approved YES
for reporting
Name of counsel for Shri Arjun Agrawal, learned counsel for the
parties petitioners.
Shri Himanshu Joshi, learned counsel for the
official respondent(s).
None for the private respondents despite
service.
Law laid down *Article 226 of the Constitution - Judicial
review of contract matter - Law
summarised- if the decision making process is
shown to be arbitrary, unreasonable and hits
Wednesbury principles, interference can be
made
*Clause 8 of the NIT - The bidder was
required to furnish informations regarding the
vehicle to be provided by him. The respondent
No.4 has not filled up relevant entries of the
prescribed form and did not file relevant
documents along with his tender. The
technical bid of respondent No.4 was rightly
rejected by the department.
*Review of decision by Department - After
rejecting the technical bid of respondent No.4,
2 WP No.17290/20 & 18637/20
the Department reviewed its decision without
there being any enabling provision which was
held to be impermissible. Review of decision
to make respondent No.4 as eligible was taken
for no valid reasons. Thus, the impugned
decisions of review whereby respondent No.4
was held to be eligible are set aside and
direction was issued to consider the
petitioners.
*Validity of a decision/order- Needs to be
tested on the reasons mentioned therein and
cannot be validated by substituting reasons by
filing counter affidavit before the Court.
Significant 11 to 21
paragraph numbers
ORDER
(Passed on 22nd July, 2021)
Sujoy Paul, J:-
In these petitions, the parties are at loggerheads on the validity
of decision of the respondents in accepting bid of private respondent
after declaring him as disqualified. It is further prayed that since
petitioners are the lowest bidders and qualified the technical bid, they
may be awarded the tender. Since both the petitions are similar, on the
joint request of the parties, the matters were analogously heard and
decided by this common order.
2) Facts are taken from WP No.17290/2020.
3) The respondent/department issued a notice inviting tender
(NIT) on 26/06/2020 (Annexure P/5) for transport of posts on the
route Indore to Burhanpur. It was pointed out that the only difference
in the connected matter is that the route involved therein is different.
The petitioners, respondent No.4 and other persons submitted their
tender submission form. The petitioners duly submitted their signed
tender documents. Petitioners duly filled up all the relevant columns
of the prescribed tender form. They furnished the necessary
information against relevant columns and also filed supporting
documents which is evident from a bare perusal of Annexure P/6, P/7
& P/8. It is pointed out that respondent No.4 also submitted his signed
tender document (Annexure P/10). However, he did not submit the
details of proposed vehicles which was the heart and soul of the tender
because tender was for transfer of posts. The relevant page of tender
document (Page-113) was left blank and no vehicle details have been
provided by respondent No.4. In addition, respondent No.4 submitted
an affidavit stating that if his bid is accepted and in turn, tender is
awarded to him, respondent No.4 will provide a new vehicle for the
purpose of fulfilling the mandatory requirement/eligibility criteria of
the tender.
4) Shri Arjun Agrawal, learned counsel for petitioners submits that
technical bids were opened on 28/07/2020 and respondent No.4 was
found to be disqualified in the technical bid because he did not
provide details of vehicle and stated in the affidavit that new vehicle
will be provided if contract is awarded to him. Criticising the
impugned minutes dated 07/10/2020 (Annexure P/13), Shri Agrawal
urged that the technical bid of private respondents were rejected on
28/07/2020, but for no valid reasons, the said decision was reviewed
without therebeing any enabling provision for review and respondent
No.4 was permitted to participate in further tender process. In reply
the respondents supported their action by contending that respondent
No.4 furnished vehicle details with the bid, but since documents were
not legible, he produced legible copies of said documents and,
therefore, on 07/10/2020, the technical bid was reviewed.
5) The petitioners raised their eyebrows on such review by
contending that :-
i) there exists no enabling provision to review a decision and
hence such review is impermissible and runs contrary to the
judgments of Supreme Court reported in (1971) 3 SCC 844
(Patel Narshi Thakershi & Ors. vs. Shri Pradyuman Singhji
Arjunsinghji). Reliance is placed on Division Bench judgment
of Calcutta High Court in APOT No.344/2013 (Electrosteel
Castings Ltd. vs. Kolkata Municipal Corporation & Ors.)
decided on 07/08/2013.
ii) In contract matters, interference can be made if the
procedure of taking decision is arbitrary and faulty. The
impugned decisions in these cases are irrational, arbitrary and
malicious in nature. Reliance is placed on (2000) 2 SCC 617
(Air India vs. Chochin International Airport Ltd.) and
(2001) 2 SCC 451 (W.B. State Electricity Board vs. Patel
Engineering Co.).
iii) If the impugned order/minutes do not contain the reason
for review i.e. providing legible documents at subsequent stage,
this defence taken for the first time by way of counter affidavit
in the Court cannot be entertained as per Constitution Bench
judgment of Supreme Court in (1978) 1 SCC 405 (Mohinder
Singh Gill vs. Chief Election Commissioner),.
6) In nutshell, Shri Agrawal, learned counsel for the petitioners
submits that after having declared respondent No.4 as ineligible at the
stage of technical bid, it was no more open to the respondents to
review their decision. Moreso, when there exists no enabling
provision and no valid reason for undertaking the said exercise.
7) Countering the said argument, Shri Himanshu Joshi, learned
counsel for the Department supported the impugned decision and
award of contract in favour of respondent No.4. He submits that
although on 28/07/2020, the respondent No.4 was held to be
disqualified at the stage of examining the technical bid, he was found
to be eligible subsequently on 28/07/2020. The decision to review was
taken by the Department pursuant to the direction of Chief Post
Master General. He submits that review committee's decision dated
07/10/2020 (Annexure R/4) is in consonance with law. There is no
fault in the process adopted by the respondents. By placing reliance on
(2007) 14 SCC 517 (Jagdish Mandal vs. State of Orissa & Ors.) and
(2020) 16 SCC 759 (Bharat Coking Coal Limited & Ors. vs. Amr
Dev Prabha & Ors.), Shri Joshi urged that the scope of interference in
Article 226 of Constitution in contractual matters is limited. In
absence of arbitrariness, malice or any serious flaw in the process in
which decision is taken, interference is not warranted. The petitioner
in his E-mail (page-149) and in Annexure P/5 dated 26/06/2020
himself accepted that relevant papers of respondent No.4 were made
available to the department after opening of technical bid. Thus, no
fault can be found in the impugned minutes and consequential award
of contract to the private respondents.
8) Nobody appeared for private respondents in both the cases in
spite of due service of notice.
9) Parties confined their arguments to the extent indicated above.
10) We have bestowed our anxious consideration on rival
contentions and perused the record.
11) Before dealing with rival contentions we deem it proper to
remind ourselves with the scope of judicial review in contractual
matter. Lord Diplock stated in (1985) 1 AC 374, at 415 (Council of
Civil Services Union vs. Minister for Civil Services):-
".....one can conveniently classify under three
heads the grounds on which administrative action is
subject to control by judicial review. The first ground I
would call 'illegality', the second 'irrationality' and the
third 'procedural impropriety'."
12) In Council of Civil Services Union (supra), Lord Diplock has
suggested a three-fold classification of the various grounds on which
an administrative decision can be reviewed by a court. These grounds
are:
(i) 'Illegality' which means that the "decision-
maker must understand correctly the law that regulates
his decision-making power and must give effect to it".
It means that the decision-maker must keep within
the scope of his legal power. Illegality means that the
decision-maker has made an error of law; it represents
infidelity of an official action to a statutory purpose. Such
grounds as excess of jurisdiction, patent error of law, etc.
fall under the head of "illegality".
(ii) 'Irrationality' denotes unreasonableness in the
sense of Wednesbury unreasonableness.
(iii) Procedural Impropriety- The expression
includes failure to observe procedural rules including the
rules of natural justice or fairness wherever these are
applicable."
The Supreme Court followed the dictum of Lord Diplock in
Council of Civil Services Union (supra) in Tata Cellular vs. Union
of India, (1994) 6 SCC 651.
13) The Apex Court in catena of judgments held that the judicial
review of a contractual matter is permissible on certain parameters.
In Tata Cellular (supra) and Elektron Lighting Systems (P) Ltd. vs.
Shah Investments Financial Developments & Consultants (P) Ltd.,
(2015) 15 SCC 137, the Apex Court opined that the judicial review in
contract matter is permissible if action impugned is shown to be
arbitrary. In Ramana Dayaram Shetty vs. International Airport
Authority of India, (1979) 1 SCC 489, Dutta Associates (P) Ltd. v.
Indo Merchantiles (P) Ltd., (1997) 1 SCC 53, Heinz India (P) Ltd.
v. State of U.P., (2012) 5 SCC 443 and Kalinga Mining Corpn. v.
Union of India, (2013) 5 SCC 252, the Supreme Court ruled that if
decision making process or the decision is unreasonable, interference
can be made even in contractual matters. In Sterling Computers Ltd.
v. M & N Publications Ltd., (1993) 1 SCC 44, Master Marine
Services (P) Ltd. v. Metcalfe & Hodgkinson (P) Ltd., (2005) 6 SCC
138, Michigan Rubber (India) Ltd. v. State of Karnataka, (2012) 8
SCC 216 and State of Jharkhand v. CWE-SOMA Consortium,
(2016) 14 SCC 172, the Wednesbury principle is also applied to test
the decision making process adopted in a contractual matter.
Reference may be made to Raunaq International Ltd. v. I.V.R.
Construction Ltd., (1999) 1 SCC 492, Air India Ltd. v. Cochin
International Airport Ltd., (2000) 2 SCC 617, Jagdish Mandal v.
State of Orissa, (2007) 14 SCC 517, Reliance Energy Ltd. v.
Maharashtra State Road Development Corpn. Ltd., (2007) 8 SCC 1,
Sanjay Kumar Shukla v. Bharat Petroleum Corpn. Ltd., (2014) 3
SCC 493 and Siemens Aktiengeselischaft & Siemens Ltd. v. DMRC
Ltd., (2014) 11 SCC 288, wherein Apex Court opined that apart from
the facets of arbitrariness, unreasonableness and parameters relating
to Wednesbury principles, the public interest element is also an
essential facet which can be looked into in a contractual matter. (See
also Krsnaa Diagnostics Pvt. Ltd. State of M.P [2021 (1) JLJ 582]).
14) In view of principles laid down in aforesaid cases, it is to be
seen whether impugned decision taken by respondents is legal and
justifiable. Indisputably, in the instant case when technical bid of
candidates were opened on 28/7/2020, the respondent No.4 was held
to be disqualified. He was found to be disqualified because of not
fulfilling the requirement of Clause 8 of NIT which reads as under:-
"8. The make and model of the vehicle
should be specified separately. Copies of
registration certificate, fitness certificate and
insurance should be enclosed along with technical
bid. All the vehicles must have valid road permit to
run in the territory of Madhya Pradesh."
(emphasis supplied)
15) The respondent No.4 admittedly did not furnish the necessary
informations regarding vehicles in the relevant columns of his tender
form which is evident from a plain reading of his form and more
particularly Annexure III of the prescribed form (Page 113). In this
form he was required to provide following informations:-
Details of the Vehicle
(i) Type of vehicle
(ii) Make and Model
(iii) Year of manufacture
(iv) Registration No./Date
(v) Type of fuel used
(vi) Fitness/Road worthiness
(vii) Insurance validity of the vehicle
(viii) PAN No.
(ix) GST No.
(x) Annual turnover 2017-18
(xi) Annual turnover 2018-19
16) The affidavit of respondent No.4 (page 136) clearly establishes
that he intended to provide details of vehicle only when his bid is
accepted. For this reason, admittedly the respondent No.4 was not
found to be eligible. However, the three members review committee
on 7/10/2020 took the impugned decision. Relevant portion of which
reads as under:-
"tujsV fd;s x;s nLrkostksa ds vk/kkj ij fufonkvksa dk
fooj.k psd fyLV esa ntZ fd;s x, dqy 06 fufonkvksa esa ls ckck
VªkaliksVZ] 95 vjfoUn fogkj] ckx eqxkfy;k] Hkksiky ,oa dchj
baVjizkbtsl] 115 ch] xzhu ikdZ dkWyksuh] bankSj & 452002 }kjk
izLrqr fufonk] 'krksaZ ds vuqdwy ugha ik;h x;h D;ksafd fufonkdrkZ }
kjk izLrqr ?kks"k.kk i=d ds vk/kkj ij fufonk Lohd`r gksus ij mlds
}kjk u;k okgu dz; djds miyC/k djkus dh lgefr nh x;h gS ]
tcfd fufonk Kkiu dh 'krksZa ds varxZr dsoy miyC/k okgu ds
fy;s gh fufonk izfdz;k esa Hkkx fy;k tk ldrk gSA
v/kh{kd jsy Mkd lsok bankSj }kjk lfefr ds lnL; Jh ,e-
ds- Jhokl] izoj v/kh{kd Mkd?kj bankSj flVh ,oa Jh xksiky
eqtkYnk] lgk;d ys[kkf/kdkjh ¼SB½ dk;kZy; iksLVekLVj tujy
bankSj {ks= dks tkjh i= dzekad
[email protected],e,e,[email protected]&[email protected];[email protected]&21 bankSj
fnukad 06-10-2020 ds rkjrE; esa vkt fnukad 07-10-2020 dks
lfefr ds lnL;ksa }kjk v/kh{kd jsy Mkd lsok bankSj ds dk;kZy; esa
mifLFkr gksdj rdfudh cksyh ds dk;Zo`Rr fnukad 28-07-2020 dh
iqu% leh{kk dh x;h rFkk v/kh{kd jsy Mkd lsok vk;Mh eaMy bankSj
dks tkjh {ks=h; dk;kZy; ds i= dzekad
esYl&[email protected]@bankSj&[email protected]&II] fnukad 23-09-2020 esa fn;s
x;s funsZ'kksa ds ifjikyu esa fufonkdkj ckck VªkaliksVZ] 95 vjfoUn
fogkj] ckx eqxkfy;k] Hkksiky dh fufonk dks 'kkfey djrs gq,
rdfudh cksyh dk iqu% la'kksf/kr dk;Zo`Rr tkjh fd;k x;k ftlds
vk/kkj ij fufonkdrkZ dchj baVjizkbtsl] 115 ch] xzhu ikdZ
dkWyksuh] bankSj & 452002 dks NksMd+ j 'ks"k lHkh ikap fufonkvksa dh
rdfudh cksyh mi;qDr ekuh x;h] ftldk fooj.k layXu vusDtj
¼psdfyLV½ esa nf'kZr gSA^^
17) A plain reading of the aforesaid paragraphs makes it clear that
technical bid of respondent No.4 was not found to be in consonance
with conditions of NIT because he intended to provide details of
vehicle after getting the contract. This decision was reviewed by
three member committee but no enabling provision of review was
shown to this court. The division bench of Calcutta High Court in
Electrosteel Castings Ltd (supra) opined as under:-
"In the absence of any power reserved by the
Corporation in terms and condition of NIT to
review its decision, we are of the considered opinion
that it was a misadventure on the part of the
Corporation to make aforesaid concession which it
could not have defended on merits and it was also
incumbent upon the Single Bench to go into the
legality of such concession. Concession could not have
been made in respect of mandatory terms and
conditions of the tender. It would be discriminatory to
permit at a subsequent stage, such a waiver of a
mandatory technical qualification due to subsequent
event. Particularly in process of tender question of
eligibility is to be examined with respect to a particular
date."
(emphasis supplied)
18) In absence of showing enabling provision, the decision to
review the previous decision dated 7/10/2020 was wholly
impermissible. Moreso when no reasons are assigned in the minutes
dated 7/10/2020 as to what necessitated the committee to review the
previous decision and treat respondent No.4 as eligible. In other
words, the impugned minutes nowhere shows that the relevant
documents of respondent No.4 were received by the Committee
subsequently which compelled them to review the decision. This
defence is taken for the first time in the reply filed before this Court.
In Mohinder Singh Gill Vs. Chief Election Commission (supra),
the Apex Court opined as under:-
"8.......Public orders, publicly made, in exercise of
a statutory authority cannot be construed in the light of
explanations subsequently given by the officer making
the order of what he meant or of what was in his mind,
or what he intended to do. Public orders made by public
authorities are meant to have public effect and are
intended to affect the actings and conducts of those to
whom they are addressed and must be construed
objectively with reference to the language used in the
order itself.
Orders are not like old wine becoming better as
they grow older."
(emphasis supplied)
19) In view of above judgments of supreme court it is clear that
interference can be made in contract matters if decision making
process is arbitrary, capricious and hits Wednesbury principles. The
condition No.8 of NIT makes it obligatory for the bidder to furnish
the details regarding make and model of vehicle. In addition, the
copies of registration certificate, fitness certificate, insurance etc were
required to be enclosed with the Tender form. As noticed, the
necessary informations were not furnished by respondent No.4 as per
Annexure III of tender document. His affidavit leaves no room for
any doubt that he intended to provide details of vehicle after getting
the contract. This clearly runs contrary to condition No.8 of NIT.
The action of respondents in reviewing the previous decision without
any enabling provision and for no valid reason cannot be
countenanced. In our considered opinion, the respondent No.4 was
rightly held ineligible in the meeting held on 28/7/2020 and decision
to review the same is arbitrary, unjust, unreasonable and attracts
Wednesbury principles. The decision making process is certainly
arbitrary and runs contrary to Clause 8 of the NIT. Thus, the
impugned decision in both the cases whereby respondent No.4 was
held to be eligible needs to be interfered with. Consequently, the
contracts given to respondent No.4 also deserve to be set aside.
20) The petitioners have pleaded that they were the lowest bidder if
respondent No.4 is excluded. Shri Himanshu Joshi did not dispute
the same during the course of arguments. Thus, while setting aside
the impugned decision dated 7/10/2020 and contracts given to
respondent No.4 in both the cases, we deem it proper to direct the
respondents to consider the claim of petitioners for grant of contracts.
The entire exercise be completed within 30 days from the date of
production of copy of this order.
21) The petitions are allowed.
(Sujoy Paul) (Anil Verma)
Judge Judge
vm/soumya
Digitally signed by
SOUMYA RANJAN
DALAI
Date: 2021.07.22
16:31:28 +05'30'
