Orissa High Court
Va Tech Wabag Limited vs Steel Authority Of India Limited on 8 August, 2023
ORISSA HIGH COURT: CUTTACK
AFR
W.P(C) NO. 19399 OF 2023
In the matter of an application under Article 226 of the
Constitution of India.
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VA TECH WABAG LIMITED ..... Petitioner
-Versus-
Steel Authority of India Limited
and another ..... Opp. Parties
For petitioner : Mr. S.P. Mishra, Sr. Advocate
along with M/s. Soumya Mishra,
O. Parida, G.N. Parida and
A. Agarwal, Advocates.
For opp. parties : M/s. B.S Das, L.C. Behera,
S. Sahoo and D. Marandi,
Advocates
P R E S E N T:
THE HONOURABLE DR. JUSTICE B.R.SARANGI
AND
THE HONOURABLE MR JUSTICE MURAHARI SRI RAMAN
Date of Hearing: 04.08.2023:: Date of Judgment: 08.08.2023
DR. B.R. SARANGI, J. VA TECH WABAG LIMITED, which is a
multinational company, having its headquarters at Chennai
and listed in Stock Exchange, with over ninety-five years of
plant building experience, turnkey execution and operation
of water and wastewater treatment plants for both the
municipal and industrial sectors, has filed this writ petition
seeking to quash the letter dated 10.06.2023 under
Annexure-16, by which the petitioner's request for
consideration of its bid for placement of order was denied in
view of the tender terms and conditions and the fact that
the petitioner's debarment/ban order passed by the Delhi
Jal Board continues to exist on that date. Essentially, the
bid submitted by the petitioner has not been considered by
opposite party no.1 due to debarment/ ban order issued by
the Delhi Jal Board.
2. The factual matrix of the case, in a nutshell, is
that, Steel Authority of India Limited (hereinafter to be
referred as "SAIL"), a Central Public Sector Undertaking
under the ownership of Ministry of Steel, Government of
India, floated an Invitation for Bids (hereinafter to be
referred to as "IFB") on 19.07.2022 for the "Treatment
System-2 under Implementation of Zero Liquid Discharge
System Including Operation and Maintenance for Five
Years at Rourkela Steel Plant, Rourkela, Odisha" (Package
No. 04). The tender document was of two parts/sections.
Section-I relates to the Commercial Volume that consists of
the Invitation for Bids, Bid Data Sheet and Special
Conditions of Contract (SCC) and Section-II relates to the
Standard Bidding Document which consists of (i)
Instruction to Bidders (ITB), (ii) Form of Contract
Agreement, (iii) General Conditions of Contract (GCC) and
(iv) Safety code for contractors.
2.1 Section-A of the Commercial Volume consists of
the Invitation for Bids which states the scheduling of the
Tender submission on 09.08.2021 at 14.30 Hours IST and
the opening of the Tender on 09.08.2022 at 15.00 Hours
IST. Further, the information for bids stipulated that the
bids to be submitted by prospective bidders along with
Rs.70,00,000/- (Rupees Seventy Lakhs only) towards
Earnest Money Deposit. The time for completion of work
was stated as 18 (Eighteen) months from the effective date
of the contract. The bid submitted was stated to be kept
valid for 180 days from the scheduled date of tender
opening. The bid consists of three parts: Part I - Bid
Security, Bid Security exemption document/Bid Securing
Declaration and Integrity Pact; Part II - Eligibility Criteria
Fulfilment & Techno-Commercial Bid; and Part III - Price
Bid only.
2.2 Section-B of the Commercial Volume contains
the Bid Specific Data [Bid Data Sheet] for the bidders
including but not limited to Technical and Financial
Eligibility Requirements together with the undertakings/
declaration by the bidder for compliance in accordance with
Company law. The Bid Data Sheet further provides that the
Bid-specific data for the Facilities including plant and
equipment to be procured, installed and commissioned,
shall amend and/or supplement the provisions in the
Invitation for Bids (IFB) and Instructions to Bidders (ITB).
Whenever there is a conflict, the provisions therein shall
prevail over those in the IFB and ITB.
2.3 Section-D under Annexure-A deals with Check
List for submission of Bid. In view of the conditions
stipulated in IFB, the Petitioner-Company having more than
ninety-five years of plant building experience, turnkey
execution and operation of water and wastewater treatment
plants for both the municipal and industrial sectors and
having a successful track record of executing over 6000
municipal and industrial projects globally with quality and
commitment towards timely delivery was fulfilling the
technical and financial eligibility/requirements, submitted
its bid in respect of works enlisted under Package No. 04 of
the IFB being eligible to participate in tender process as it
was not serving any banning orders issued by SAIL
debarring them from carrying on business dealings with
SAIL. Along with the bid, the petitioner, as required by the
opposite parties in the Tender document, had furnished a
declaration for blacklisting dated 12.09.2022 and had
disclosed in the bid submission that the petitioner was not
blacklisted/ banned from business dealings by any
organization, except in Delhi Jal Board vide letter dated
15.10.2020. The said letter was challenged by the petitioner
before the High Court of Delhi in W.P.(C) 8342/2020 & CM
APPL. 27045/2020. In the said declaration the petitioner
had also highlighted about the debarment guidelines issued
by the Government of India (Ministry of Finance No.
F.1/20/2018-PPD) dated 02.11.2021 and stated that the
debarment issued by Delhi Jal Board will not prevent the
petitioner from participating in bidding contracts in line
with clause 5 (d) which states that it shall not be circulated
to other Ministries/ Departments and it will only be
applicable to all attached/ subordinate offices, autonomous
bodies, Central Public Sector Undertakings (CPSUs), etc. of
the Ministry/ Department issuing the debarment order and
neither the petitioner is blacklisted, nor any action has
been taken against as defaulter/ barred from participating
in tenders by any Odisha State Government agencies/
semi-Government agencies. The petitioner also deposited
Earnest Money Deposit/Bank Guarantee to the tune of
Rs.70,00,000/- (Rupees Seventy Lakhs only) on 22.08.2021
which is valid till 30.06.2023 before the opposite parties on
12.09.2022 for executing the works, i.e., Package No. 04, as
per the tender notice.
2.4 The nature of the Tender in question was a
"Hard Copy Submission Tender" and the evaluation of the
same was divided into two parts, i.e., technical and
financial. The technical evaluation was to be carried out in
accordance with the requirements set forth in the technical
specification in the bidding document. There was also scope
for evaluating additional documents in the manner
prescribed under Clause 3 of the technical specification.
The price evaluation was also to be done on the basis of
"Total Contract Price Net of Input Tax Credit for GST" as
quoted by the bidders in the summary price schedule. In
addition to the same, the price quoted by the bidders
towards five years of operation and maintenance was also
to be considered for price evaluation of the bidders.
2.5 Pursuant to the technical evaluation, the
financial bid was to be opened on 18.11.2022. On
16.11.2022, the petitioner was invited by opposite party no.
2 for opening of the price bid submitted against the subject
tender and the petitioner was requested to send an
authorised representative to attend the meeting on its
behalf. As required, the petitioner nominated & deputed its
personnel to attend the price bid.
2.6 Though opposite party no. 2 had recognized that
the bid of the petitioner was the lowest to its counterparts
and was announced as L1 by the functionaries of the
opposite party no. 2, but there was an unusual delay in the
issuance of Letter of Award (LOA) and while the petitioner
was waiting for the LOA, the petitioner received an e-mail
dated 29.12.2022 from opposite party no. 2 seeking the
status of the Writ Petition being W.P.(C) No. 8342 of 2020
which was instituted by the petitioner against Delhi Jal
Board in respect of a separate tender where the Delhi Jal
Board had debarred the petitioner. In response to the
same, the petitioner submitted its extensive reply on
06.01.2023 disclosing all the relevant facts and the status
of the said case as required by opposite party no. 2, where
it was indicated that the High Court of Delhi had concluded
hearing of the matter and passed a judgment on
22.12.2022 by upholding the debarment of the farm, which
is being challenged in the appeal and the same is pending.
Although the writ petition was filed against the debarment
order dated 15.10.2020 issued by the Delhi Jal Board for a
period of three years from the date of issue of the letter, but
by way of interim order the High Court of Delhi had passed
an order that the order of debarment/ blacklisting passed
by Delhi Jal Board shall not prevent the petitioner for
contracts with other organizations till further orders.
2.7 On receipt of the letter dated 06.01.2023,
opposite party no. 2 sought additional clarification vide its
e-mail dated 20.01.2023 calling upon the petitioner to
produce an order of a competent court of law for setting
aside the order dated 22.12.2022 passed by the High Court
of Delhi in W.P.(C) No. 8342 of 2020. In response to the
same, the petitioner replied that an L.P.A No. 8 of 2023 was
filed challenging the impugned judgement passed by the
learned Single Judge in the writ petition. Without taking
the same into consideration in its proper perspective, a
communication was made to the petitioner on 16.06.2023
under Annexure-16 that the debarment of Delhi Jail Board
still exists on that date, for which they are not in a position
to consider the request made by the petitioner for issuance
of LOA in its favour. Hence, this writ petition.
3. Mr. S.P. Mishra, learned Senior Advocate
appearing along with Mr. Soumya Mishra, learned counsel
for the petitioner vehemently contended that the work
which had been allotted by Delhi Jal Board was completely
distinct and separate from the nature of work to be
undertaken by the opposite parties in the present bid
document. The debarment order passed by Delhi Jal Board
was confined to the said organisation and that has got
nothing to do with any other organisation including the
opposite parties. Therefore, the debarment of the petitioner
by the Delhi Jal Board should not have stood on the way of
issuance of LOA in its favour being a successful bidder. The
opposite parties-organisation being a State instrumentality
is to act in conformity with Article 14 vis-a-vis fairness in
action. If the same has not been done, then the order so
passed cannot be sustained in the eye of law. It is therefore
contended that in exercise of power under judicial review,
the Court may not sit as an appellate authority over the
decision of the Government, but looking into the decision
making process, it has to come to a conclusion that the
same has not suffered from any vice of arbitrariness and
unreasonableness within the meaning of Article 14 of the
Constitution of India. Applying the same to the present
context, the impugned letter under Annexure-16 cannot be
sustained in the eye of law. It is further contended that
giving of specific reason is one of the fundamentals of good
administration. Transparency is the sine qua non of
restraint on the abuse of powers vested on the competent
authorities. Therefore, it puts a mandate to assign reason
in support of the finding rendered. The requirement to
record reasons emanates from the broad doctrine of
fairness in the decision making process and salutary
requirement of the principle of natural justice. The same
having not been adhered to, the order impugned dated
10.06.2023 under Annexure-16 is liable to be quashed. To
substantiate his contention, reliance has been placed on
Food Corporation of India v. Kamdhenu Cattle Feed
Industries, AIR 1993 SC 1601; Tata Cellular v. Union of
India, (1994) 6 SCC 651 and Master Marine Services (P)
Ltd v. Metcalfe & Hodgkinson (P) Ltd. and another,
(2005) 6 SCC 138.
4. Mr. Bhabani Shankar Das, learned counsel
appearing on behalf of opposite parties no.1 and 2
vehemently justified the order dated 10.06.2023 under
Annexure-16 and also contended that the request of the
petitioner for consideration of its bid for placement of LOA
was duly examined and could not be considered due to the
banning order of Delhi Jal Board, which is in force, and
thereby the petitioner, having been banned/ blacklisted,
has been debarred from getting the LOA as per Clause-29 of
the bid (commercial) which is a tender condition. Therefore,
he seeks for dismissal of the writ petition. Reliance has also
been placed on Clause-11.4 of the Guidelines on "Banning
Business Dealing" attached with the Integrity Pact duly
signed by the petitioner and also Clause-18 of the IFB.
Thereby, contended that the opposite parties are well
justified in passing the order impugned debarring the
petitioner from getting the LOA in its favour. Since the
debarment/ ban order passed by the Delhi Jal Board
continues to exist on this date, the opposite parties are not
in a position to consider the request made by the petitioner.
Thereby, seeks for dismissal of the writ petition.
5. This Court heard Mr. S.P. Mishra, learned Senior
Advocate appearing along with Mr. Soumya Mishra, learned
counsel for the petitioner and Mr. B.S. Das, learned counsel
appearing for opposite parties no.1 and 2 in hybrid mode
and perused the records. Pleadings have been exchanged
between the parties and with the consent of learned
counsel for the parties, the writ petition is being disposed of
finally at the stage of admission.
6. Before delving into the merits of the case, it is
apposite to refer to the relevant provisions of tender
document:-
"SECTION-A
INVITATION FOR BIDS
"28. The Company reserves its rights to remove from
the list of approved supplier/contractors or to ban
business dealings, if any Agency has been found to
have committed misconduct, and also to suspend
business dealings pending investigation.
The procedure under which removal of an
agency from the list of approved suppliers
/contractors of suspension or banning of business
dealings will be dealt may be referred on our web site
as part of the tender documents.
29. Banned / suspended firm / suppliers and
contractor etc. are not eligible for submission of
quotation / offers against any type of tender during
the period for which they have been suspended /
banned for business dealings and if submitted, those
quotations/ offers will be treated as unsolicited and
will not be considered."
SECTION-B
BID DATA SHEET
Eligibility/ The Bidder should fulfil the
Qualification following eligibility criteria:-
requirements A. Technical Eligibility
for Bidders Requirements:
ITB 1.1, ITB The bidder having credentials of
8.3 (b) & (c), complying with the minimum
ITB 22.5 eligibility as stipulated herein
below in totality would be
considered technically eligible.
The bidder may be opting to bid as
a sole bidder, or a consortium
constituted to maximum 3 (three)
firms or companies through a
Consortium Agreement. Experience
of having completed similar work
during last 10 (Ten) years ending
last day of the month previous to
the one in which NIT is invited and
the same should be in operation for
a minimum period of one year
during last 10 (ten) years ending
last day of the month previous to
the one in which NIT is invited in
the following manner:
(i) One (01) similar completed
work with minimum installed
RO plant capacity of 300 m3/hr
and having feed flow rate to
individual RO steam not less
than 100 m3/hr.
(ii) Two (02) similar completed
work with minimum installed
RO plant capacity of 200 m3/hr
and having feed flow rate to
individual RO steam not less
than 100 m3/hr.
Undertakings The Bidder must give declaration
for on the following:
Compliance a) 'Whether the proprietor /
with partner / Director of the firm/
Company company has any relationship
Law ITB 38 within the meaning of Section 6
of the Companies Act 2013
with any of the employee
working in the plants / units
concerned or Director of SAIL,
including its subsidiaries'.
b) 'Whether the person or team
representing the firm is also
representing any other firm
participating against the
tender'.
c) 'Whether Bidder is currently
serving any banning orders
issued by SAIL debarring them
from carrying on business
dealings with SAIL'.
The Bidder must also submit a
"Non-collusive Tendering
Certificate" against Cartelization as
per Annexure-8 of ITB of SBD-2020
of this tender document.
• Non-disclosure! Incorrect
disclosure of the above details
factually by a firm either on its
own while submitting its offer
or upon enquiry at the option of
SAIL during the scrutiny of its
offer may invite penal action
against the firm, which may
include rejection of the offer,
suspension of business
dealings or both.
SECTION-D
CHECK LIST FOR SUBMISSION OF BID
14 A declaration stating that the firm is
not black listed/ banned from
business dealing by any
organisation.
INTEGRITY PACT
"11.4. If business dealing with any Agency
have been banned by the Central or State
Government or any other Public Sector Enterprise,
SAIL may on receipt of such information, without any
further enquiry or investigation, issue an order
banning business dealings with the Agency and its
inter-connected Agencies. In event of receipt of
information the procedure for banning in SAIL will still
have to be followed though no investigation will be
called for, and the banning period proposed should be
co-terminus with the period of banning in the
organisation which has issued the banning order but
limited to the maximum period of banning as per the
extant banning guidelines of SAIL. On completion of
the banning period as per SAIL banning order, the
Agency will be eligible for participating in any tenders
in SAIL irrespective of banning status in the other
organization."
7. It is not in dispute that the petitioner
participated in the process of tender and was qualified both
in technical and financial bid. Though he was declared as
L1 but no LOA was issued in its favour. In addition to the
Technical and Financial requirements/eligibility conditions
contained in the IFB, ITB and Bid Data Sheet of the tender
document, the bidders were required to make an
undertaking/declaration for compliance in accordance with
Company Law. As per the Bid Data Sheet under Section-B,
the bidder was required to give a declaration as to whether
the proprietor / partner /Director of the firm/ company has
any relationship within the meaning of Section 6 of the
Companies Act, 2013 with any of the employee working in
the plants / units concerned or Director of SAIL, including
its subsidiaries. As per Clause-c, a declaration was to be
given by the bidder as to whether it is currently serving any
banning orders issued by SAIL debarring it from carrying
on business dealings with SAIL. As per the check list under
Annexure-A of Section-D, at Sl. No. 14, the bidder has to
give declaration stating that the firm is not blacklisted/
banned from business dealing by any organisation. As per
Clause-29 of IFB, the banned suspended firm / suppliers
and contractor etc. are not eligible for submission of
quotation / offers against any type of tender during the
period for which they have been suspended / banned for
business dealings and if submitted, those quotations/
offers will be treated as unsolicited and will not be
considered.
8. As per Sl. No. 14 of the check list under
Annexure-A of Section-D, the bidder has to give declaration
stating that the firm is not blacklisted/ banned from
business dealing by "any" organisation.
The use of word "any" has its own meaning.
Thereby, it requires according to the circumstances, it may
mean "all", "each", "every", "some", "or one or more out of
several". In other words, it can be construed that the firm is
not blacklisted/banned from business dealing by other
organisations also.
If the meaning of "any" will be taken into
consideration, then the word "any" is defined in judicial
Dictionary of Words and Phrases (Fifth Edition by John S.
James) as a word which excludes limitation or qualification.
As has been extracted from Black's Law
Dictionary Fifth Edition and referred to in the case of Shri
Balagansan Metals v. M.N. Shanmugam Chetty, AIR
1987 SC 1668, the word 'any' has the following meaning-
"Some, one out of many' an infinite number, one
indiscriminately of whatever kind or quantity; or
may be employed to indicate 'all or 'every' as well
as 'some' or 'all'".
In Lucknow Development Authority v. M.K.
Gupta, AIR 1994 SC 787, the apex Court observed that the
use of word 'any' in the context it has been used in clause
(a) indicates that it has been used in wider sense extending
from one to all.
In Rane Narang v. Rama Narang, AIR, 2006
SC 1883, the apex Court observed that the word 'any' in
Section 2 (b) of the Act indicates wide nature of the power
under the Act.
In Associated Indian Mechanical P. Ltd v.
W.B. Small Industries Development Corporation Ltd,
(2007) 3 SCC 607 : AIR 2007 SC 788, the apex Court
observed that the word 'any' used in the opening part of the
Section 2 (c) of the Act is a word of very wide meaning and
prima facie the use of it excludes limitation.
9. If these meaning will be taken into consideration,
then if the petitioner has been blacklisted by any other
organisation, it incurs a disqualification. However, as per
Clause-c of the Bid Data Sheet, the petitioner had to
declare whether it is currently serving any banning orders
issued by SAIL debarring it from carrying on business
dealings with SAIL. Admittedly, no such debarment order
has been passed by SAIL against the petitioner. Therefore,
this clause has no effect for the purpose of consideration of
debarring the petitioner from participating in the bid.
10. Clause-29 makes it very clear that
banned/suspended firm/suppliers and contractor etc. are
not eligible for submission of quotation/offers against any
type of tender during the period for which they have been
suspended/banned for business dealings and if submitted,
those quotations/ offers will be treated as unsolicited and
will not be considered.
10.1 There is no dispute before us that the petitioner
has been debarred by the Delhi Jal Board for a period of
three years from participating in any bid of the very same
Board. It has also been clarified that it will not affect the
petitioner to participate in any other organisation. The ban
order issued by Delhi Jal Board dated 15.10.2020 under
Anenxure-18 was in respect of work: 45 MGD Sewage
Treatment Plant and other related associated/ allied
appurtenant works on design, Build & Operated basis at
Kondli, Delhi. A detailed reasoned order has been passed
debarring the petitioner to participate directly or indirectly
in any work/ tender/bid connected with Delhi Jal Board,
which has been indicated at Clause-16 of the order. The
contention was raised that even though such ban order has
been issued, so far as Delhi Jal Board is concerned, but it
has got its wide ramification in view of Clause-29 of IFB,
which enlarges the scope that the petitioner is not eligible
for submission of quotation/offers against any type of
tender during the period for which they have been
suspended/banned for business dealings.
10.2 More so, the ban order issued by the Delhi Jal
Board had been challenged before the High Court of Delhi
in W.P.(C) No. 8342 of 2020 and CM APPL No. 27045/2020,
whereby an interim order was passed on 02.12.2021
protecting the interest of the petitioner. But subsequently
such interim order has merged with the final order with the
disposal of the writ petition vide judgment dated
22.12.2022, upholding the debarment order. However, the
said judgment of the learned Single Judge has been
challenged in LPA No. 8 of 2023 before the Division Bench
of the High Court of Delhi.
11. A contention was raised on behalf of the
petitioner that while passing the order impugned under
Annexure-16 dated 10.06.2023, principle of natural justice
was not complied with. Such contention is not correct, in
view of the fact that, on receipt of certain information
regarding debarment/ blacklisting of the petitioner by Delhi
Jal Board, the petitioner was called upon, vide letter dated
29.12.2022 under Annexure-9, to clarify the position on
return mail. In response to the same, the petitioner
submitted a detailed reply on 06.01.2023 under Annexure-
10, where reference was made to the office memorandum
dated 02.11.2021 of the Department of Expenditure,
Ministry of Finance, Government of India on debarment of
firms from bidding. The petitioner had also given further
reply on 30.03.2023 under Annexure-12 and on
considering the same the order impugned having been
passed, it cannot be stated that there was non-compliance
of the principle of natural justice.
12. However, emphasis was laid by the learned
counsel for the petitioner on the interim order passed by
High Court of Delhi, where the order of banning by Delhi
Jal Board was challenged. The banning order dated
15.10.2020 of Delhi Jal Board made it clear the petitioner
cannot participate in any bidding process in respect to the
projects directly or indirectly connected with Delhi Jal
Board. Therefore, the said prohibition cannot be extended
to the projects where Delhi Jal Board does not concern. In
view of the office memorandum dated 02.11.2021 issued by
the Central Government, wherein it has been envisaged
that every blacklisting order cannot be made the basis of
debarring a farm across all Ministries/Departments.
Rather, it envisages a multi tied approach for debarring a
farm across various departments. The office memorandum
also provides that if an action of debarment across
Ministries /Departments is to be taken, then the Ministry of
Finance, Department of Expenditure, Government of India
has to apply its mind as to whether such an action is
justified or not by considering all the relevant papers and
documents. This shows that debarment across all
Ministries is not automatic and has to be done on a case-
to-case basis and only by the said Ministry. Therefore, in
absence of any such decision by the Ministry of Finance in
terms of office memorandum dated 02.11.2021, the
petitioner cannot be prevented from participating in the
tenders invited by any other Government organizations
except Delhi Jal Board.
13. Apart from the above, the bid was submitted by
the petitioner prior to the final order passed by the High
Court of Delhi in W.P.(C) No. 8342 of 2020. Therefore, it is
well within its right as the bid was validly submitted by the
petitioner and such bid cannot be refused to be looked into
by the concerned agency, merely on the ground that Delhi
Jal Board has debarred, as the same is not covered under
the office memorandum dated 02.11.2021.
14. Mr. B.S. Das, learned counsel appearing on
behalf of the opposite parties laid emphasis on Clause-29 of
the IFB, but under the peculiar facts and circumstances, as
discussed above, the petitioner should not have been
debarred to participate in the bid as the present bid is no
way connected with the tender floated by Delhi Jal Board.
Even if there is a ban order passed by the Delhi Jal Board
for a different nature of work, that cannot be equated or
taken into consideration while considering the bid of the
petitioner in the present case. Thereby, the decision making
process, by which the petitioner has been debarred, cannot
be sustained in the eye of law.
15. In Food Corporation of India (supra), the apex
Court at paragraph-7 of the said judgment held as follows:-
"7. In contractual sphere as in all other State
actions, the State and its instrumentalities have to
conform to Art. 14 of the Constitution of which non-
arbitrariness is a significant facet. There is no
unfettered discretion in public law: A public authority
has possesses power only to use them for public
good. This imposes the duty to act fairly and to adopt
a procedure which is fairplay in action.' Due
observance of this obligation as a part of good
administration raises a reasonable or legitimate
expectation in every citizen to be treated fairly in his
interaction with the state and its instrumentalities,
with this element forming a necessary component of
the decision-making process in all State actions. To
satisfy this requirement of non-arbitrariness in a
State action, it is, therefore, necessary to consider
and give due weight to the reasonable or legitimate
expectations of the persons likely to be affected by the
decision or else that unfairness in the exercise of the
power may amount to an abuse or excess of power
apart from affecting the bonafides of the decision in a
given case. The decision so made would be exposed
to challenge on the ground of arbitrariness. Rule of
law does not completely eliminate discretion in the
exercise of power, as it is unrealistic, but provides for
control of its exercise by judicial review."
16. In Tata Cellular (supra), the apex Court at
paragraph-70 of the said judgment held as follows:-
"it cannot be denied that the principles of judicial
review would apply to the exercise of contractual
powers by Government Bodies in order to prevent
arbitrariness or favouritism. However, it must be
clearly stated that there are inherent limitations in
exercise of that power of judicial review. Government
is the guardian of finances of the State. It is expected
to protect the financial interest of the State. The right
to refuse the lowest or any other tender is always
available to the Government. But, the principles laid
down in Article 14 of the Constitution have to kept in
view while accepting or refusing a tender........."
17. In Master Marine Services (supra), the apex
Court at paragraph-12 of the said judgment held that
"After an exhaustive consideration of a large number
of decisions and standard books on administrative
law, the Court enunciated the principle that the
modern trend points to judicial restraint in
administrative action. The court does not sit as a
court of appeal but merely reviews the manner in
which the decision was made. 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. The Government must have freedom of
contract. In other words, 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
principles of reasonableness but also must be free
from arbitrariness not affected by bias or actuated by
mala fides. It was also pointed out that quashing
decisions may impose heavy administrative burden
on the administration and lead to increased and
unbudgeted expenditure."
18. Keeping in view the above mentioned judgments,
it is made clear that transparency, being the sine qua non of
restraint on abuse of powers vested on the competent
authorities, without assigning any reason in support of the
findings rendered, it affects the doctrine of fairness in the
decision making process.
19. Franz Schubert said-
"Reason is nothing but analysis of belief." In
Black's Law Dictionary, reason has been defined as a-
"faculty of the mind by which it distinguishes
truth from falsehood, good from evil, and which
enables the possessor to deduce inferences from facts
or from propositions."
20. It means the faculty of rational thought rather
than some abstract relationship between propositions and
by this faculty, it is meant the capacity to make correct
inferences from propositions, to size up facts for what they
are and what they imply, and to identify the best means to
some end, and, in general, to distinguish what we should
believe from what we merely do believe.
Therefore, reasons being a necessary
concomitant to passing an order allowing the authority to
discharge its duty in a meaningful manner either furnishing
the same expressly or by necessary reference.
21. "Nihil quod est contra rationem est licitum"
means as follows:
"nothing is permitted which is contrary to reason. It is
the life of the law. Law is nothing but experience
developed by reason and applied continually to
further experience. What is inconsistent with and
contrary to reason is not permitted in law and reason
alone can make the laws obligatory and lasting."
Therefore, recording of reasons is also an assurance that
the authority concerned applied its mind to the facts on
record. It is pertinent to note that a decision is apt to be
better if the reasons for it are set out in writing because the
reasons are then more likely to have been properly thought
out. It is vital for the purpose of showing a person that he is
receiving justice.
In Re: Racal Communications Ltd. (1980)2 All
ER 634 (HL), it has been held that the giving of reasons
facilitates the detection of errors of law by the court.
In Padfield v. Minister of Agriculture,
Fisheries and Food (1968) 1 All E.R. 694, it has been held
that a failure to give reasons may permit the Court to infer
that the decision was reached by the reasons of an error in
law.
22. In Union of India v. Mohan Lal Capoor, AIR
1974 SC 87, it has been held that reasons are the links
between the materials on which certain conclusions are
based and the actual conclusions. They disclose how the
mind is applied to the subject-matter for a decision whether
it is purely administrative or quasi-judicial and reveal a
rational nexus between the facts considered and 12
conclusions reached. The reasons assure an inbuilt support
to the conclusion and decision reached. Recording of
reasons is also an assurance that the authority concerned
applied its mind to the facts on record. It is vital for the
purpose of showing a person that he is receiving justice.
Similar view has also been taken in Uma
Charan v. State of Madhya Pradesh, AIR 1981 SC 1915.
23. In Travancore Rayons Ltd. v. The Union of
India, AIR 1971 SC 862 it is observed by the apex Court
that the necessity to give sufficient reasons which disclose
proper appreciation of the problem to be solved, and the
mental process by which the conclusion is reached in cases
where a non-judicial authority exercises judicial functions
is obvious. When judicial power is exercised by an authority
normally performing executive or administrative functions,
the Supreme Court would require to be satisfied that the
decision has been reached after due consideration of the
merits of the dispute, 13 uninfluenced by extraneous
considerations of policy or expediency. The court insists
upon disclosure of reasons in support of the order on two
grounds: one, that the party aggrieved in a proceeding
before the court has the opportunity to demonstrate that
the reasons which persuaded the authority to reject his
case were erroneous; the other, that the obligation to record
reasons operates as a deterrent against possible arbitrary
action by the executive authority invested with the judicial
power.
24. In view of the aforesaid facts and circumstances,
the order impugned dated 10.06.2023 under Annexure-16
cannot be sustained and accordingly the same is liable to
be quashed and is hereby quashed. As a consequence
thereof, the opposite parties are directed to take into
consideration the bid submitted by the petitioner for award
of work in question in its favour.
25. In the result, therefore, the writ petition stands
allowed. But, however, in the circumstances of the case,
there shall be no order as to costs.
(DR. B.R. SARANGI)
JUDGE
M.S. RAMAN, J. I agree.
(M.S. RAMAN)
JUDGE
Orissa High Court, Cuttack
The 8th August, 2023, Arun
Signature Not Verified
Digitally Signed
Signed by: ARUN KUMAR MISHRA
Designation: ADR-cum-Addl. Principal Secretary
Reason: Authentication
Location: Orissa High Court, Cuttack
Date: 08-Aug-2023 17:12:28
