Between vs Delhi Metro Rail Corporation ...
2021 Latest Caselaw 4903 UK

     IN THE HIGH COURT OF UTTARAKHAND
                       AT NAINITAL
      ON THE 3RD DAY OF DECEMBER, 2021
                              BEFORE:
     HON'BLE SHRI JUSTICE MANOJ KUMAR TIWARI

        Writ Petition (M/S) No. 608 of 2021
BETWEEN:
Natasha Zutsi                                               ...Petitioner
      (By Mr. Sandeep Kothari, Advocate)

AND:

Collector/District Magistrate,
District Dehradun and others                            ...Respondents
      (By Mr. T.S. Phartiyal, Additional Chief Standing Counsel for the State
      and Mr. Pooran Singh Rawat, Advocate for respondent no.3.)


                           JUDGMENT

By means of present writ petition, petitioner has sought following reliefs:-

"a) Issue writ, order or direction in the nature of Certiorari for quashing the allotment order dated 03.03.2021 (Annexure No.-5) passed by the respondent no.-1 made in favour of the respondent no.-3 with respect to the Beer Shop Subhash Nagar, Saharanpur Road, Dehradun.

b) Issue a writ, order or direction in the nature of Certiorari for quashing the impugned order dated 03.03.2021 (Annexure No.-5) passed by the respondent no.-1, whereby, when the technical bid of the petitioner has been rejected.

c) Issue a writ, order or direction in the nature of Mandamus directing the respondent nos.-1 & 2 to consider the technical bid of the petitioner and further consequently to consider the financial bid and to issue the allotment order in favour of the petitioner the financial bid of the petitioner is highest."

2. Collector, Dehradun invited bids for grant of 'Beer shop' licence. Petitioner also submitted bid, however, her bid was rejected on the ground that the same is not in conformity with

Clause 13 (a) of the Government Order dated 12.02.2021.

3. Clause 13 of Government Order dated 12.02.2021 provides that a bidder would be required to submit solvency certificate, which shall be of the value of 10% of the total revenue of the shop applied for. Sub-clause (a) of Clause 13 further provides that F.D.R of the same value, duly pledged in favour of District Magistrate, would be acceptable in place of Solvency Certificate.

4. It is not in dispute that every bidder had to fulfil the conditions mentioned in the Government Order dated 12.02.2021. Condition contained in Clause 13 (a) provided that in-lieu of solvency certificate, F.D.R. pledged in favour of District Magistrate, may be accepted. Admittedly, petitioner had not submitted F.D.R. in terms of condition contained in Clause 13 (a), instead she had submitted a bank-draft of the required amount.

5. It is the contention of learned counsel for the petitioner that since petitioner has furnished the required amount through a bank- draft, and it is substantial compliance of the condition contained in Clause 13 (a) of Government Order dated 12.02.2021, therefore, rejection of petitioner's bid is unjust.

6. Per-contra, Mr. T.S. Phartiyal, Additional Chief Standing Counsel for the State submits that not only petitioner had furnished a bank-draft in

place of Fixed Deposit Receipt, but the bank draft submitted by the petitioner was made payable to District Excise Officer and not to District Magistrate. Thus, according to him, petitioner's bid could not have been accepted as it was in derogation of express condition contained in Clause 13 (a).

7. It is not in dispute that after rejecting petitioner's bid, respondent no.3 was declared successful and licence in question was granted to him.

8. It is contended by learned counsel for the petitioner that petitioner had offered higher price for the Beer shop licence, compared to respondent no.3, therefore, the licence if given to petitioner would have resulted in more revenue to the State. This contention may appear to be attractive in the first blush, but on closer scrutiny it does not hold any substance. This Court while exercising power of judicial review do not sit in appeal over the decisions of administrative bodies but only examines the decision making process to ascertain whether there was any infirmity warranting interference, as held in (2019) 18 SCC

39.

9. Hon'ble Supreme Court in the case of Siemens Aktiengeselischaft and Siemens Limited Vs. Delhi Metro Rail Corporation Limited and Others (2014) 11 SCC 288 has considered and discussed scope of judicial review, in such matters.

Relevant paragraphs of the judgment are extracted below:-

"18. The principles governing the judicial review of administrative decisions are now fairly well settled by a long line of decisions rendered by this Court since the decision of this Court in Ramana Dayaram Shetty v. International Airport Authority of India which is one of the earliest cases in which this Court judicially reviewed the process of allotment of contracts by an instrumentality of the State and declared that such process was amenable to judicial review. Several subsequent decisions followed and applied the law to varied situations but among the latter decisions one that reviewed the law on the subject comprehensively was delivered by this Court in Tata Cellular cases wherein this Court once again reiterated that judicial review would apply even to the exercise of contractual powers by the Government and government instrumentalities in order to prevent arbitrariness or favouritism. Having said that this Court noted the inherent limitations in the exercise of that power and declared that the State was free to protect its interest as the guardian of its finances. This Court held that there could be no infringement of Article 14 if the Government tried to get the best person or the best quotation for the right to choose cannot be considered to be an arbitrary power unless the power is exercised for any collateral purpose. The scope of judicial review, observed this Court, was confined to the following three distinct aspects:

(i) Whether there was any illegality in the decision which would imply whether the decision-making authority has understood correctly the law that regulates his decision- making power and whether it has given effect to it;

(ii) Whether there was any irrationality in the decision taken by the authority implying thereby whether the decision is so outrageous in its defiance of logic or accepted moral standards that no sensible person who had applied his mind to the question to be decided could have arrived at the same; and

(iii) Whether ere was any procedural impropriety committed by the decision-making authority while arriving at the decision.

19. The principles governing judicial review were then formulated in the following words: (Tata Cellular case, SCC pp. 687-88, para 94) "(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 expertise 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.

(6) Quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure."

20. In M.P. Oil Extraction v. State of M.P. this Court held that if an objective and rational foundation for the fixation of royalty is disclosed, the Court will not interfere with the exercise of governmental decision by undertaking an exercise to determine whether or not a better fixation was possible in the circumstances. This Court struck a note of caution that in economic and policy matters the scope of judicial review was limited.

21. It is unnecessary and platitudinous for us to burden this judgment with reference to the decisions of this Court on the subject for the governing principles are so well known and well settled that any review of the law on the subject is bound to be simply repetitive without any meaningful contribution to the existing legal literature on the subject. We remain content by referring to only two of a plenitude of judicial pronouncements on the subject in which the legal position has been succinctly restated. One of these decisions was delivered in Jagdish Mandal v. State of Orissa, where too. this Court was dealing with the exercise of power of judicial review in matters relating to tenders and award of contracts. This Court identified the special features that should be borne in mind while judicially reviewing. award of contracts. We can do no better than extract the following observations of this Court in this regard: (SCC p. 531, para 22) "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."

23. There is no gainsaying that in any challenge to the award of contract before the High Court and so also before this Court what is to be examined is the legality and regularity of the process leading to award of contract. What the Court has to constantly keep in mind is that it does not sit in appeal over the soundness of the decision. The Court can only examine whether the decision-making process was fair, reasonable and transparent. In cases involving award of contracts, the Court ought to exercise judicial restraint where the decision is bona fide with no perceptible injury to public interest."

10. Similar view was expressed by the Apex Court in case of Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corpn. Ltd., reported in (2016) 16 SCC 818. Relevant extract of the said judgment is reproduced below:-

"11. Recently, in Central Coalfields Ltd. v. SLL-SML (Joint Venture Consortium) it was held by this Court, relying on a host of decisions that the decision-making process of the employer or owner or project in accepting or rejecting the bid of a tenderer should not be interfered with. Interference is permissible only if the decision-making process is mala fide or is intended to favour someone. Similarly, the decision should not be interfered with unless the decision is so arbitrary or irrational that the Court I could say that the decision is one which no responsible authority acting reasonably and in accordance with law could ve reached. In other words, the decision-making process or the decision. should be perverse and not merely faulted or incorrect or erroneous. No such extreme case was made out by GYT-TPL JV in the High Court or before us.

12. In Dwarkadas Marfatia and Sons v. Port of Bombay it was held that the constitutional courts are

concerned with the decision-making process. Tata Cellular v. Union of India went a step further and held that a decision if challenged (the decision having been arrived at through a valid process), the constitutional courts can interfere if the decision is perverse. However, the constitutional courts are expected to exercise restraint in interfering with the administrative decision and ought not to substitute its view for that of the administrative authority. This was confirmed in Jagdish Mandal v. State of Orissa as mentioned in Central Coalfields."

13. In other words, a mere disagreement with the decision making process or the decision of the administrative authority is no reason for a constitutional court to interfere. The threshold of mala fides, intention to favour someone or arbitrariness, irrationality or perversity must be met before the constitutional court interferes with the decision-making process or the decision.

14. We must reiterate the words of caution that this Court has stated right from the time when Ramanna Dayaram Shetty v. International Airport Authority of India was decided almost 40 years ago, namely, that the words used in the tender documents cannot be ignored or treated as redundant or superfluous-they must given meaning and their necessary significance. In this context, the use of the word "metro" in Clause 4.2(a) of Section III of the bid documents and its connotation in ordinary parlance I cannot be overlooked"

11. Learned counsel for the petitioner submitted that petitioner had submitted the required amount through bank-draft, as such, she had substantially completed the condition contained in Clause 13 (a), therefore, her bid could not have been rejected.

12. This submission made on behalf of the petitioner is devoid of merit. When the employer puts a specific condition that an amount equal to 10% of the total revenue of the shop has to be deposited through Fixed Deposit Receipt, pledged in favour of District Magistrate, then other mode of furnishing the amount, cannot be treated as sufficient compliance of the condition. The

insistence on the condition of Fixed Deposit Receipt is not far to see. A bank-draft is valid for a certain period (say three months) while Fixed Deposit Receipt, remains valid without any boundation of time and there is also provision for auto renewal of Fixed Deposit Receipt. Moreover, a Fixed Deposit Receipt can be pledged in favour of any authority while this is not the case with a bank-draft. Upon expiry of validity period, bank- draft cannot be en-cashed by the person to whom it is payable, therefore, insistence upon condition contained in Clause 13 (a) by the respondents has a purpose.

13. In such view of the matter, this Court has no hesitation in holding that the requirement of submitting Fixed Deposit Receipt under Clause 13 (a) of Government Order dated 12.02.2021 is an essential condition of tender, therefore, rejection of the bid submitted by petitioner cannot be held to be unjust or illegal.

14. Learned counsel for the petitioner then submits that the condition contained in Clause 13

(a) could not have been applied to the case in hand as the said condition is applicable while granting licence for liquor shop. Thus, according to him insistence upon the said condition in the present case is not proper.

15. The said submission cannot be accepted for the simple reason that petitioner submitted her bid knowing fully well that she has to abide-by all the terms/conditions contained in Government

Order dated 12.02.2021. Clause 13 (a) unequivocally provided that only Fixed Deposit Receipt would be acceptable for the amount of solvency certificate, yet petitioner submitted bid with eyes wide open but instead of Fixed Deposit Receipt, she submitted a bank-draft. Therefore, after submitting her bid she cannot now raise a grievance that the condition contained in Clause 13 (a) is not applicable or is arbitrary.

16. In such view of the matter, there is no scope for interference in the matter.

17. Accordingly, the writ petition is dismissed. Interim order dated 01.10.2021 stands vacated.

(MANOJ KUMAR TIWARI, J.) Shubham