Union of India & Ors Vs. Hindustan Development Corpn. & Ors [1993] INSC 222 (15 April 1993)
Reddy, K. Jayachandra (J) Reddy, K. Jayachandra (J) Ray, G.N. (J)
CITATION: 1994 AIR 988 1993 SCR (3) 128 1993 SCC (3) 499 JT 1993 (3) 15 1993 SCALE (2)506
ACT:
Constitution of India, 1950:
Articles 12, 14, 19, 32, 136, 226, 298. 299-Government Contracts.-Railway Board-Tender to supply, cast steel bogies-Three of the tenderers quoting identical price- Inference of formation of cartel-Board's decision of dual pricing to control unfair trade practice and not to accept lowest price-Held, dual pricing under certain circumstances may be reasonable-Railways decision to adopt dual pricing under the circumstances was bonafide.
Administrative Law:
Government contracts-Judicial review of.
Doctrine of Legitimate Expectation-Concept,scope and applicability of.
Words and Phrases.- "Cartel ", "predatory. "-Meaning of.
HEAD NOTE:
These special leave petitions were disposed of by this Court's order dated 14.1.1993.By the said order the Court gave its conclusions and certain directions observing that reasons In support thereof would be given at a later stage.
Giving the reasons in support of the conclusions, this Court,
HELD:
1.1 The Government in a Welfare State has the wide powers in regulating and dispensing of special services like leases, licences, and contracts etc. The Government while entering Into contracts or issuing quotas is expected not to act like a private individual but should act in conformity with certain healthy stan- 129 dards and norms. Such actions should not be arbitrary, irrational or irrelevant. In the matter of awarding contracts, inviting tenders is considered to be one of the fair ways. If there are any reservations or restrictions then they should not be arbitrary and must be justifiable on the basis of some policy or valid principles which by themselves are reasonable and not discriminatory. (144-G-H, 145-A) Erusian Equipment and Chemicals Ltd. v. State of West Bengal [1975] 2 SCR 674, Ramana Dayaram Shety v. The International Airport Authority of India and Ors. [1979] 3 SCR 1014, and Kasturi Lal Lakshmi Reddy v. State of Jammu and Kashmir and Anr. [1980] 3 SCR 1338, relied on.
1.2 The concept of reasonableness rinds its positive manifestation and expression in the lofty ideal of social and economic justice which inspires and animates the Directive Principles, and Article 14 strikes at arbitrariness In State action. (149-C) Maneka Gandhi v. Union of India. [1978] 2 SCR 621, and E.P. Royappa v. State of Tamil Nadu & Anr. [1974] 2 SCR 348, relied on.
1.3 The policy of the Government is to promote efficiency in the administration, to provide an incentive to the uneconomic units to achieve efficiency, to prohibit concentration of economic power and to control monopolies so that the ownership and control of the material resources of the community are so distributed as best to subserve the common good, and to ensure that while promoting industrial growth there is reduction in concentration of wealth and that the economic power is brought about to secure social and economic justice. (159-F, 161-C) Monopolies Inquiry Commission's Report, referred to.
American Jurisprudence 2 vol. 54. p. 668, referred to.
1.4 In view of the conditions in the tender notice, validity whereof was not questioned, the Government had the right to either accept or 130 reject the lowest offer. From a perusal of the proceedings of the Tender Committee as well as the opinion expressed by the Financial Commissioner and the other members of Railway Board, it is clear that Rs. 76,000 per bogie could be the reasonable price and the post tender offer at a lower price was made with the hope that the three big manufacturers would get the entire or larger quantity allotted,-which, if accepted, would result in monopoly extinguishing the smaller manufacturers. (46 D-G) State of Uttar Pradesh and others v. Vijay Bahadur Singh and others [1982]2 SCC365, State of Orissa and Ors. v. Harinarayan Jaiswal and Ors. [1972] 3 SCR 784, G.B. Mahajan and others V. Jalgaon Municipal Council and others [1991] 3 SCC 91, State of Madhya Pradesh & ors. v. Nandial Jaiswal & Ors. [1987] 1 SCR 1, Shri Sitaram Sugar Co. Ltd. V. Union of India [1990] 3 SCC 223, R.K. Garg v. Union of India [1981] 4 SCC 675, and Peerless General Finance and Investment Co. Limited and another etc. v. Reserve Bank of India etc. [1992] 2 SCC 348, relied on.
2.1 The cartel is an association of producers who by agreement among themselves attempt to control production, sale and prices of the product to obtain a monopoly in any particular, industry or commodity. It amounts to an unfair trade practice which is not in the public interest. The intention to acquire monopoly power can be spelt out from formation of such a cartel by some of the producers.(167B-C) Collins English Dictionary; Webster comprehensive Dictionary International Edition; chamber's English Dictionary; Black's Law Dictionary: A Dictionary of Modern Legal Usage by Bryan A. Garner; American Jurisprudence 2d Vol. 54, page 677- referred to.
2.2 However, the determination whether an agreement unrea- sonably restrains the trade depends on the nature of the agreement and on the surrounding circumstances that give rise to an inference that the parties intended to restrain the trade and monopolise the same. (167 C-D) 131 National Electrical contractors Associations, Inc, et, at, National constructors Associations et. al., Federal Reporter 2d Series, 678 page 492, Matsushita Electric Industrial Co. Ltd., et. at v. Zenith Radio Corporation et al, 89 L.Ed. 2d 538, referred to.
2.3 Monopoly is the power to control prices or exclude competition from any part of the trade or commerce among the producers. The price fixation is one of the essential factors. (171-E) American Jurisprudence 2d Vol. 54, referred to.
2.4 A mere offer of a lower price by itself though may appear to be predatory, does not manifest the requiste intent to gain monopoly and in the absence of a specific agreement by way of a concerted action suggesting conspiracy, the formation of a cartel among the producers who offered such lower price cannot readily be inferred.
(172 B-C) Matsushita Electric Industrial Co. Ltd. et. al. v. Zenith Radio Corporation et. al. 89 L.Ed. 2d 538, referred to.
Webster Comprehensive Dictionary, International Edition; A dictionary of Modern Legal Usage by Bryan A. Garner; Collins English Dictionary Black's Law Dictionary; The oxford English Dictionary Vol. VIII, referred to.
2.5 The opinion of the Tender Committee that the identical price quoted by the three big manufacturers was a cartel price, was only a suspicion which got strengthened by post- tender attitude of the said manufacturers who quoted a much lesser price, and cannot positively be concluded on the basis of these two circumstances alone. There is not enough material to conclude that in fact there was formation of a cartel. (173 B-C)
2.6 A mere quotation of identical price and an offer of further reduction by themselves could not entitle the said manufacturers automatically to corner the entire market by way of monopoly since the final allotment of quantities vested in the authorities who in their 132 discretion can distribute the same to all the manufacturers including these three big manufacturers on certain basis.
Besides. the authorities reserved a right to reject a lower price. (172-F, 173-A-B)
2.7 However, the opinion regarding formation of a cartel entertained by the concerned authorities including the Minister was not malicious nor was actuated by any extraneous considerations. They entertained a reasonable suspicion based on the record and other surrounding circumstances and only acted in a bonafide manner in taking the stand that the three big manufacturers formed a cartel.
(173-C)
3.1 The legitimacy of an expectation can be Inferred only if it is founded on the sanction of law or custom or an established procedure followed in regular and natural sequence. It Is distinguishable from a genuine expectation.
Such expectation should be justifiably legitimate and protectable. Every such legitimate expectation does not by itself fructify into a right and therefore it does not amount to a right in the conventional sense, A case of legitimate expectation would arise when a body by representation or by past practice aroused expectation which it would be within its powers to fulfil. The claim based on the principle of legitimate expectation can be sustained and the decision resulting in denial of such expectation can be quashed provided the same is found to be unfair, unreasonable, arbitracy and violative of principle of natural justice. (182-C, 192-A) Food Corporation of India v. M/s Kamdhenu Cattle Feed Industries JT (1992) 6 S.C. 259, relied on.
Halsbury's Law of England. fourth Edition, vol. 1 (1) 151, Administrative Laws of England, Sixth Edition by H.W.R. Wade, page 424, 522, referred to.
Schmidt v. Secretary of State for Home Affairs (1969) 2 Ch. 149;A.G. of Hong Kong v. Ng Yeun Shiu (1983) 2A.C.629;In Council of Civil Service Unions and others v. Minister for the Civil Service (1984) Vol.3 All E.R. 935, Amarjit Singh Ahluwalia v. The State of Punjab & Ors. [1975] 3 SCR 82; Att. Getz. for New South Wales v. Ouin [1990] Vol. 64 Australian Law 133 Journal Reports 327; 'R. v. Secretary of State for the Home Department ex parte Ruddock & Ors. (1987)2 All E R 518, Breen v. Amalcamated Engineering Union & Ors. (1971) 2 Law Reports Queen Bench Division 173, referred to.
3.2 Legitimate expectation gives the applicant sufficient locus standi for judicial review and the doctrine of legitimate expectation is to be confined mostly to, right of a fair hearing before a decision which results in negativing a promise or withdrawing an undertaking is taken. The doctrine does not give scope to claim relief straightaway from the administrative authorities as no crystalised right as such is involved. (191-F) Navyoti Coo-Group Housing Society etc. v. Union of India & Others (1992) 2 Scale 548; Findlay v. Secretary of State for the Home Department (1984) 3 All E R801 and Council of Civil Service Unions case Lord diplock--
3.3 Legitimate expectation being less then right operate in the field of public and not private law and to some extent ought to be protected thought not guaranteed. (193-C)
3.4 Legitimate expectations may come in various forms and owe their existence to different kind of circumstances. By and large they arise in cases of promotions which are in normal course expected, though not guaranteed by way of a statutory right, in cases of contracts, distribution of largess by the Government and in somewhat similar situations. (193-D)
3.5 Protection of legitimate expectation would not be available where an overriding public interest requires otherwise. The protection is limited to that extent and a judicial review can be within those limits. (191-H; 192-A- B).
3.6 A person who bases his claim on the doctrine of legitimate expectation, in the first instance, must satisfy that there is a foundation and thus has locus standi to make such a claim. The decision taken 134 by the authority must be found to be arbitrary, unreasonable and not taken in public interest. It that be so then what should be the relief is again a matter which depends on several factors. (192-C-D-E)
3.7 The courts jurisdiction to interfere is very Much limited and much less in granting any relief in a claim based purely on the ground of 'legitimate expectation'. A decision denying a legitimate expectation based on a policy or change of an old policy, or in the public interest either by way of G.O., rule or is made by way of a legislation does not qualify for interference unless in a given case, the decision or action taken amounts to an abuse of power. (193- E-F) Att. Gen. for New South Wales v. Quin [1990] Vol. 64 Australian Law Journal Reports 327, referred to.
Public Law and Politics-edited by Carol Harlow, referred to.
3.8 Therefore the limitation is extremely confined and if the according of natural justice does not condition the exercise of the power. The concept of legitimate expectation can have no role to plan and the Court must not usurp the discretion of the public authority which is empowered to take the decisions under law and the court is expected to apply an objective standard which leaves to the deciding authority the full range of choice which the legislature is presumed to have intended. Even in a case where the decision is left entirely to the discretion of the deciding authority without any such legal bounds and if the decision is taken fairly and objectively, the court will not interfere on the ground of procedural fairness to a person whose interest based on legitimate expectation might be affected. (193-G-A; 194-A)
3.9 If a denial of legitimate expectation in a given case amounts to denial of right guaranteed or is arbitrary,discriminatory, unfair or based, gross abuse of power or violation of principles of natural justice, the same can be questioned on' the well-known grounds attracting Article 14 but a claim based on mere legitimate expectation without anything more cannot ipso facto give a right to invoke these principles. It can be one of the grounds to consider but the court must lift the veil and see whether the decision is violative of these principles warranting interference. (194-E-F) 135 3.10 The concept of legitimate expectation is "not the key which unlocks the treasury of natural justice and it ought not to unlock the gates which shuts the court out of review on the merits," particularly when the element of speculation and uncertainty is inherent in that very concept. The courts would restrain themselves and restrict such claims duly to the legal limitations. It is a well-meant caution.
Otherwise a resourceful litigant having vested interests in contracts, licences etc. can successfully indulge In getting welfare activities mandated by directive principles thwarted to further is own interests. The caution, particularly in the changing scenario, becomes all the more important. (194- G-H; 195-A-B) Att. Gen. for New South Wales v. Quin 1990 Vol. 64 Austraian Law Journal Reports 327, referred to.
3.11 In the instant case, the Rules for entering into contracts lay down certain norms and contain guidelines.
They provide for constitution of Tender Committee and the procedure to be followed in the matter of inviting tenders.
They also provide for negotiations but lay down that selection of contracts by negotiations is an exception rather than a rule and can be resorted to only under certain circumstances. As per the notice inviting tender, the price quoted is subject to price variation clause and the Railways reserved a right to accept the lowest price or accept the whole or any part or the tender or portion of the quantity offered. The tenderer cannot expect that his entire tender should be accepted in respect of the quantity. In the past also there were man-,, instances where the Railways as per the procedure followed, arrived at decisions in respect of both price and quantity for good and justifiable reasons. (178-A-B-C)
3.12 There is no legally fixed procedure regarding fixation of price and particularly regarding allotment giving scope to a legitimate expectation. The Tender Committee is not a statutory authority and its proposals are recommendatory in nature and have to be considered in the distribution procedure culminating in the decision of the approving authority who as a matter of fact, also can take decisions in respect of price and allotment of quantities taking into consideration various other aspects from the point of view of public interest. (178-D-E) 136
4. The modifications In the decision of the Railways by way of judicial review are not on the ground of legitimate expectation and violation of principles of natural justice but on the other ground namely the decision of the authorities was based on wrong assumption of formation of Cartel. (195 F-G) 5.The status of a manufacturer being a BIFR company or a small manufacturer was not taken Into account so far as the fixation of the price is concerned and these considerations were deemed relevant only for the purpose of allocation of quantities. The stand taken by the Railways is that smaller manufacturers should survive from the point of view of arresting monopolistic tendencies and from the point of view of public interest. The Tender Committee proceedings would indicate that on the basis of certain formulae namely the past performance, capacity etc, the allotment was being made. Therefore, these cannot be said to be irrelevant considerations and as a matter of fact they had been duly given effect to and weightage was given accordingly in respect of allotment of quantities to various manufacturers within the four corners of the limited tender. (196 C-E)
CIVIL APPELLATE JURISDICTION: S.L.P. (C) Nos. 1189798/92 etc. etc.
From the Judgment and Order dated 28.8.1992 of the Delhi High Court in Civil Writ Petition Nos. 1152 & 1157 of 1992. V.R. Reddy, Addl. Solicitor General,, Kapil Sibbal, P.P. Rao, Rama Jois, A. Temton, Dr. Shankar Ghosh K. K. Venugopal, Harish Salve, F.S. Nariman, A.N. Haksar, Shanti Bhushan, K.N Bhat, T.R. Andhyarujina, C.V Subba Rao, P.P. Singh, Mrs. B. Sunita Rao, Sudhir Kulshreshtha, Rohit Tandon, Parijat Sinha, Ms. Sunanda Roy, Ms. S. Bhattacharya, B.D. Ahmed, Man Mohan Singh, Gopal Subramanium, D.N. Mishra, A.M. Dittia, P.K. Ganguli, Manoj K. Das. Amit Prabhat, Tripurary Roy. K.L. Mehta, S. Ganesh, Pratap Venugopal, K.J. John, Pramod Dayal, Ajay K. Jain and D.N Nanjunda Reddy for the appearing parties.
The judgment of the Court was delivered by 137 K. JAYACHANDRA REDDY, J. By our order dated 14th January, 1993 while disposing of these special leave petitions we gave our conclusions and we proposed to deliver the detailed judgment at a later stage giving all the reasons in support of those conclusions. We hereby deliver the detailed judgment In our earlier order we stated the relevant facts and the issues involved in a concised form. However, we think it appropriate and necessary to refer to some of them for a better appreciation of the reasons in their proper perspective.
Every year the Railway Board enters into contracts with the manufacturers for the supply of cast steel bogies which are used in turn for building the wagons. Cast steel bogies come under a specialised item procured by the Railways from the established sources of proven ability. There are 12 suppliers in the field who have been regularly supplying these items. Two new firms Simplex and Beekay also entered the field. Among them admittedly M/s H.D.C., Mukand and Bharatiya are bigger manufacturers having capacity to manufacture larger quantities. On 25.10.91 a Iimited tender notice for procurement of 19000 cast steel bogies was issued to the regular suppliers as well is the above two new entrants for the year namely from 1.4.92 to 31.3.93. The last date for submission of offers to the Ministry of Railways was 27.11.91 by 2.30 P.M. and the tenders were to be opened on the same day at 3 P.M. It was also stated therein that the price was subject to the price variation clause and the base date for the purpose of escalation was 1.9.91 and that the Railways reserved the right to order additional quantity upto 30% of the ordered quantity during the currency of the contract on the same price and terms and conditions with suitable extensions in delivery period. The offers were to remain open for a period of 90 days. On that day the tenders were opened in the presence of all parties.
The price quoted by the three manufacturers i.e. M/s H.D.C., Mukand and Bharatiya was an identical price of Rs. 77,666 per bogie while other tenders quoted between 83,000 and 84.500 per bogies After the tenders were opened and before the same could be finalised, the Government of India announced two major concessions namely reduction of custom duty on the import of steel scrap and dispensation of freight equalisation fund for steel. The tenders were put up and placed before the Tender Committee of the Railways which considered all the aspects. The Committee concluded 138 that three of the tenderers namely M/s H.D.C., Mukand and Bharatiya who had quoted identical rates without any cushion for escalation between 1.7.91 and 1.9.91, have apparently formed a cartel. The Tender Committee also noted that the rates quoted by them were the lowest.
Taking into consideration the reduction of Rs. 1500 as result of the concessions in respect of the reduction of customs duty on the import of steel scrap and dispensation of the freight equalisation fund for steel. The Tender Committee concluded that the reasonable rate would be Rs. 76,000 per bogie. On the question of distribution of quantities to the various manufacturers the Tender Committee decided to follow the existing procedure. The Tender Committee signed these recommendations on 4.2.92 but on the same day the Member (Mechanical) of the Committee received letters from M/s H.D.C. and Mukand. M/s H.D.C. in its letter stated that in view of the concessions and also on the basis that per Kg. rate of casting per bogie could be reduced from Rs. 37.50 to Rs. 29 the cost of casting can also be reduced and therefore they would be in a position to supply the bogies at a lesser rate, in case a negotiation meeting is called. M/s Mukand in its letter also offered to substantially reduce (he prices and they would like to co-operate with the Railways and the Government and brings down the prices as low is possible and asked for negotiations.
Though this was post- tender correspondence the Department felt that the offers made by M/s H.D.C. and Mukand could be considered. The whole matter was examined by the Advisor (Finance) in the first instance and by an collaborate note lie observed that the need for encouraging open competition to improve quality and brings down costs his been recommended by the government and if it is intended to continue the existing policy of fixing a rate and distributing the order among all the manufacturers, then negotiations may not he useful as uniform prices offered to all manufacturers have to be sufficient even for the smaller and less economical units and that as any review of the existing policy would take time, the present tender can be decided on the basis of the existing policy. With this noting the file was immediately sent to the Member (Mechanical), the net higher authority, The, with some observations however recommended the acceptance of the Tender Committee's recommendations. The file was then put up to Financial Commissioner. He noted that the Tender Committee was convinced that the three manufacturers who quoted identical price of Rs. 77,666 had formed a cartel. He also considered the offers made by M/s H.D.C. and Mukand and observed that these three manufacturers who quoted 139 a cartel price intended to get a larger order on the basis of such negotiated price which would eventually nullify the competition from the other manufacturers and lead to their industrial sickness and subsequently to monopolistic price situation. He, however, approved the Tender Committee's recommendations that a counter-offer of Rs. 76,000 may he accepted but in the case of M/s H.D.C. a price lower by Rs. 11,000 may be offered as per their letter dated 4.2.92. He also recommended that the two manufacturers M/s Cimmco and Texmaco may be given orders to the extent of their capacity or quantity offered by them whichever is lower in view of the fact that they are wagon builders and the present formula regarding the distribution of quantities may be applied to all manufacturers except the three who have formed a cartel. The also recommended some recoveries from these three manufacturers who are alleged to have formed a cartel on the basis of their letters wherein they have quoted prices which were much less than the updated price as on 1.9.91 of Rs. 79,305. He also made certain other recommendations and finally concluded that the post tender letters may be ignored and that for short-term gains the Department can not sacrifice long-term healthy competition.
After these recommendations of the Financial Commissioner the file was put up to the approving authority i.e. the Minister for Railways, who in general agreed with the recommendations of the Financial Advisor. He also noted that these three manufacturers have formed a cartel. lie also noted that subsequent to the Financial Commissioner's note, besides M/s 1 1. D. C. and Mukand has also offered to reduce the price by 10% or more vide their letter dated 19.2.92 if called for negotiations. Taking these circumstances into consideration the Minister ordered that all these three firms may he offered a price lower by Rs. 11,000 with reference to the counter-offer recommended by the Tender Committee and the quantities also be suitably adjusted so that the cartel is broken, The Minister also noted that as a result of this a saving of about Rs. 11 crores would be effected. In his note, the Minister also ordered redistribution of the quantities. The also ordered that 30% option should straightaway be exercised. After the approving authority took these decisions, the file went to the Chairman. Railway Board for implementing the decisions.
The noted that action will be taken as decided by the Minister but added that it results in dual-pricing namely one to the three manufacturers and the higher one to the others and therefore the Minister may consider whether they could counter-offer the lower price to all the manufacturers as that would result in saving much more.
140 The file was then again sent to and was considered by the Financial Commissioner who noticed this endorsement made by the Chairman, Railway Board. The however noted that so far all the other firms are concerned it is Rs. 3305 less than the present contract price but it would not be equitable to offer the lower price put forward by the three manufacturers as it Would make the other units unviable and that incidentally the price of Rs. 76,000 now proposed to be counteroffered to the other firms is also in line with the recommendations of the Tender Committee. The, however, noted that some of the units were sick units and owe a lot of money to the nationalised banks and it would therefore be in the national interest to accept dual-pricing Therefore the file was again put up to the approving authority who agreed with the recommendations of the Financial Commissioner and the Tender Committee and directed that the same may be implemented. In view of this final decision taken by the approving authority a telegram was issued to the three manufacturers giving them a Counter-offer of Rs.65,000 per bogie. The counter-offer was also made to the other nine manufacturers at the rate of Rs 76,000 per bogie namely the price worked out by the Tender Committee. Soon after the receipt of this telegram dated 18.3.92 M/s H.D.C. and Mukand filed writ petitions in the Delhi high Court challenging the so-called discriminatory counteroffer. M/s Bharatiya also filed a similar petition in Calcutta High Court but the same was withdrawn but another writ petition was filed later in the Delhi High Court. In the writ petitions filed by M/s H.D.C. and Mukund the High Court stayed the operation of the telegram dated 18.3.92 and issued notice to the Union of India and to the Executive Director and Director of the Railways (Stores) who figured as respondents in those writ petitions. M/s M. D.C. and Mukand also wrote to the Minister of Railways in reply to the telegram that they were not prepared to accept the counter-offer at the rate of' Rs. 65,000 and instead they offered lo supply the bogies at the rate of Rs. 67,000 per bogie. The Railways accepted this offer and intimated M/s H.D.C. and Mukand accordingly. The High Court. at an interlocutory stage pending the writ petitions. passed an order on 2.4.92. directing the Ministry to accept the allocation of bogies recommended by the Tender Committee and to pay a price at the rate of Rs. 67,000 only per bogie and that would be subject to the final decision of the writ petitions. Being aggrieved by this order, the Railways filed a petition for special leave to appeal no. 5512/92 and this Court while refusing to interfere at that interlocutory stage made the following observations 141 on 28.4.92:
"However, we may observe-and so direct that during the pendency of the writ petition if any of the suppliers in terms of the package of distribution indicated by the High Court (including the petitioners in the High Court in the writ petition) seek an "on account" payment representing the difference between the sum of Rs. 67,000 indicated as price by the High Court and the sum of Rs. 76,000 contemplated by the Railways; the order of the High Court shall not prohibit the government making such on-account payment to such suppliers on each wagon on the condition that the said on-account payment of Rs.9.0000) per bogie should he covered by a bank guarantee for its prompt repayment together with interest at 20% per annum in the event the on- account payment cannon( be observed in the price structure that may ultimately come to be determined pursuant to the final decision in the writ petitions.
The special leave petitions are disposed of accordingly." Thereafter the High Court took up the writ petitions for final hearings any by the impugned judgment allowed the writ petitions filed by M/s H.D.C. and Mukand and directed that all the suppliers should make the supplies at the rate of Rs. 67,000 per bogie and also set aside the quantity allocation and directed that the same should he considered afresh on a reasonable basis and pending such fresh consideration future supplies should be made on the basis of the recommendations of the Tender Committee. In the course of the judgment, the High Court also made certain observations to the effect that the decision of the approving authority is arbitrary and that the Government has no justification to offer a higher price than the market price to any supplier to rehabilitate it. It was further observed that the stand of the Railways that those three manufacturers formed a cartel is based on extraneous considerations. The learned judges of the High Court also observed that they failed to understand as to why the Railway authorities could 142 not initiate negotiations with those manufacturers who had offered to reduce their offer which could result in saving crores of 'rupees to the Railways. Aggrieved by this judgment of the High Court the Union of India filed S.L.P. (Civil) Nos. 11897-98/02. Before the High Court in the two writ petitions filed by M/s H.D.C and Mukand the other manufacturers figured as respondents Nos. 4 to 12 and M/s Bharatiya otherwise known as Besco figured as respondent No. 13. The other S.L.Ps. are filed by those nine manufacturers. M/s Bharatiya, respondent No. 13, has not questioned the judgment of the High Court. As mentioned above M/s Bharatiya filed a separate writ petition No. 1753/ 92 in the Delhi High Court after withdrawing an earlier writ petition filed in the Calcutta High Court. The same also was disposed of in terms of the judgment in the other two writ petitions Nos. 1152 and 1157/92. But they have not questioned the same. Consequently M/s Bharatiya figures as a respondent before us in the SLP filed by the Union of India.
In our earlier order we have already referred to the various Submissions made by the learned counsel on behalf of Union of India and on behalf of the respondents particularly M/s H.D.C. Mukand and Bharatiya and other smaller manufacturers. After considering the various submissions and issues involved we have given our conclusions in our earlier order which briefly stated are as follows:
1)There is no enough of material to conclude that M/s. H.D.C., Mukand and Bhartiya formed a cartel. However. there was scope for enter training suspicion by the Tender Committee that they formed a cartel since all the three of them quoted identical price and the opinion entertained by the concerned authorities including the Minister that these three big manufacturers formed a cartel was not per se malicious or was actuated by any extraneous considerations and the authorities acted in a bonafide manner in taking the stand that the three big manufacturers formed a cartel.
2)The direction of the High Court that the supply of bogie should be at Rs.67000 by every manufacturer can not he sustained and that a fresh consideration of a reasonable price is called for. The Tender Committee shall reconsider the question of fixation of reasonable price. While doing so it shall consider the offer of Rs. 67,000 made by 143 M/s H.D.C. and Mukand alongwith the data that would given by them in support of their offer and the percentage of profits available to all the manufacturers and other relevant aspects and then fix a reasonable price at which the manufacturers would be able to supply.
3) Dual pricing under certain circumstances may be reasonable and the stand of the railways to adopt dual pricing under the circumstances is bonafide and not malafide. M/s H.D.C., Mukand and Bharatiya must be deemed to be in a position to supply at the rate of Rs. 67,000 per bogie and thus they form a distinct category. The smaller manufacturers belong to a different category and if a different price is fixed for them it is not discriminatory.
4) If the price that to be fixed by the Tender Committee as directed by us happens to be more than Rs. 67,000 than that would be applicable to the smaller manufacturers only and not to M/s H.D.C., Mukand and Bharatiya who on their own commitment have to supply at the rate of Rs. 67,000.
(5) The price thus fixed by the Tender Committee which applies only to the smaller manufacturers shall he deemed to be final and the respective contracts shall be deemed to be concluded so for the price is concerned.
(6) Coming to the allotment of quota of bogies the Tender Committee made recommendations on the basis of the existing practice. The Minister of Railways in his ultimate decision has made some variations taking into consideration the recommendations of the Financial Commissioner and other authorities. In making these variations, the Minister accepting the suggestion that a cartel was formed by the three manufacturers reduced the allotment of quota to them by way of reprisal. Since we are of the view that formation of a cartel is not established, such a reduction of quota can not be justified. The Minister of Railways as the final authority as be justified in takings a particular decision in the matter of allotment of quota but such decision must be taken on objective basis. In allotting these quotas the Government is expected to be just and fair to one and all.
7)The three big manufacturers M/s H.D.C.,Mukandand Bharatiya 144 should be allotted the quantities as per the recommendations of the Tender Committee.However, the quantities finally allotted by the competent authority to the smaller manufacturers need not be disturbed and the railway authorities may make necessary adjustments next year in the matter of allocation of quantities to them takings into consideration the allotments given to them this year;
(8)It will be open to the Railways to exercise 30% option, if not already exercised.
(9)Taking all the circumstances and the time factor into consideration the time to complete the supply is extended upto 31.3.1993.
Before we proceed to consider each of these issues and give our reasons, we shall deal with few general submissions regarding the tender system and the economic policy of the Government in the matter of stopping monopolistic tendencies.
Shri K.K. Venugopal, learned counsel appearing for M/s H.D.C. at the outset submitted that in a case of this nature the Government must either by way of public auction or by way of inviting tenders work out (he lowest price and award the contract accordingly, as that would safeguard the interests of the public exchequer. The further submission in this regard is that the Railways having invited tenders and having further entertained post-tender correspondence offering the lower price, should have accepted the price quoted by the three big manufacturers. Shri Sibal, learned counsel appearing for the Union of India, however, contended that it is a matter of policy decision by the Government and that where the Government realises that the lowest ,)rice offered is not reasonable and realistic, it may for a variety of good and sufficient reasons reject the same.
It is true, as it is today, that the Government in a welfare State has the wide powers in regulating and dispensing of special services like leases, licences. and contracts etc. The magnitude and range of such Governmental function is great. The Government while entering into contracts or issuing quotas is expected not to act like private individual but should act in conformity with certain healthy standards and norms. Such actions should not be-arbitrary, irrational or irrelevant. In the 145 matter of awarding contracts inviting tenders is considered to be one of the fair ways. If there are any reservations or restrictions then they should not be arbitrary and must be justifiable on the basis of some policy or valid principles which by themselves are reasonable and not discriminatory. In the instant case the Railways every year used to enter into contracts with the established manufacturers for the supply of cast steel bogies and there are 12 such suppliers. On 25.10.91 a limited tender notice for the procurement of steel bogies was issued to these suppliers. Under Clause 5 of the Tender notice the Railways reserved the right to order additional quantity of 30% of the ordered quantity during the currency of the contract on the same price and term: with suitable extension in delivery period. Clause 7 is to the effect that the tender will be governed by the IRS conditions of the contract. In the instructions appended to the Tender notice it is again reiterated that the contracts made under the tender would be governed by the IRS conditions of contract and also the instructions in the invitation of tender. Clause 9.3 of the instructions lays down that the price is subject to price variation clause and the base date for the purpose of escalation is 1.9.91. Under Clause 23 it is made clear that the Department does not pledge itself to accept the lowest or any tender and reserves to itself the right of acceptance of the whole or any part of the tender. Pursuant to this notice and subject to (lie conditions mentioned therein, 12 manufacturers in the field a well as two new manufacturers M/s Simplex and Beekay submitted their offers and they are as follows:
NAME OF THE FIRMS PRICE QUOTED FOR 20.3.T AXLE LOAD
1. Himmat 84,510
2. Texmaco 83,950
3. Titaoarh 84,100
4. BECO Ltd. 83,350 5, Anup 84,980
6. Sri Ranga 84,600
7. Orient 84,750 146
8. Bum Standard 83,000
9. CIMMCO 84,800
10. Mukand 77,666 II. Bharatiya 77,666
12. HDC 77,666
13. Simplex 78,100
14. BEEKAY 75,000"
These offers were got technically evaluated by the Research, Development and Standard Organisation (RDSO' for short).
Thereafter a three-men Tender Committee comprising the officers of the rank of Joint Secretary designated as Executive Directors in the Railways Board considered the offers. Since the three big suppliers namely M/s H.D.C., Mukand and Bharatiya quoted an identical price of Rs. 77,666 which was lower than the updated price of the previous contract, the base date of which was 1.9,91, the Tender Committee formed an opinion that they have formed law carte
1. The offers made by the two new firms, however, were not accepted. The Tender Committee made their own recommendations and fixed Rs. 76,000 as a reasonable price at which counter offer could be made. Then as already mentioned there was post-tender correspondence and ultimately a dual price was fixed. In this regard the submission is that having entertained post-tender correspondence, the Government either should have accepted the same or rejected the same and in any event the lowest offer should have been accepted. From a perusal of the proceedings of the Tender Committee as well as the opinion expressed by the Financial Commissioner and the other members of the Board, it is clear that Rs. 76,000 per bogie can be the reasonable price and Rs. 67,000 was not a reasonable price. It is also clear that the post-tender offer at a lower price was made with the hope that they would get the entire or larger quantity allotted. The stand taken by the Railways is that the three big manufacturers originally formed a cartel and the post-tender offers at least by two of them confirmed the same and if these three big manufacturers are allotted entire or larger quantity that would result in monopoly extinguishing the smaller manufacturers. The question is whether such a stand taken by the Government as a policy, is unfair and arbitrary as to warrant interference by the courts.
147 It must be mentioned at this stage that the validity of the conditions in the tender as such are not questioned.
Consequently the Government had the right to either accept or reject the lowest offer but that of course, if done on a policy, should he on some rational and reasonable grounds.
In Eurasian Equipment and Chemicals Ltd. v. State of West Bengal [1975] 2 SCR 674, this court observed as under:
"When the Government is trading with the public, " the democratic form of Government demands equality and absence of arbitrariness and discrimination in such transactions. The activities of the government have a public element and, therefore, there should be fairness and equality. The State need not enter into any contract with anyone, hut if it does so, it must so fairly without discrimination and without unfair procedure.
Approving these principles, a Bench of this Court in Ramana Dayaram Shetty v. The International Air-port Authority of India and Ors[1979] 3 SCR 10 14, held thus:
"This proposition would hold good in all cases of dealing by the Government with the public, where the interest sought to be protected is a privilege. It must, therefore, be taken to be the law that where the Government is dealing with the public, whether by way of giving job so entering into contracts or issuing quotas or licences or granting other forms of largess, the Government cannot act arbitrarily at its sweet will and, like a private individual, deal with any person it pleases, but its action must be in conformity with standard or norms which is not arbitrary, irrational or irrelevant. The power or discretion or the Government in the matter of grant of largess including award of jobs, contracts, quotas, licences etc. must be con- fined and structured by rational, relevant and nondiscriminatory standard or norm and if the Government departs from such standard or norm in any particular case or cases, the action of the Government 148 would be liable to be struck down, unless it can he shown by the Government that the departure %%,as not arbitrary, but was based on some valid principle which in itself was not irrational, unreasonable or discriminatory." ln Kasturi Lal Lakshmi Reddy v. State of Jammu and Kashmir and Anr. [1980] 3 SCR 1338 an order awarding contract by the Government to a party was questioned on the ground that it was arbitrary, malafide and not in public interest and the same created monopoly in favour of that party and that the contract was awarded without affording an opportunity to others to compete and the same is not based on any rational or relevant principle and therefore was violative of Article 14 of the Constitution and also the rule of administrative law which inhibits the arbitrary action by the State. A Bench of this Court while approving the principles laid down in the above cases further observed thus:
"Though ordinarily a private individual would be guided by economic considerations of self- gain any action taken by him, it is always open to under the law to act contrary to his self-interest or to oblige another in entering into a contract or dealing with his property.
But the Government is not free to act is it likes in granting largess such as awarding a contractor selling or leasing out its property. Whatever be its activity, the Government is still the Government and is, subject to restraints inherent in its position in a democratic society. The constitutional power conferred on the Government cannot be exercised by it arbitrarily or capriciously or in an unprincipled manner; it has to be exercised for the public good. Every activity of the Government has a public element in it and it must therefore, be informed with reason and guided by public interest. Every action taken by the Government must be in public interest; the Government cannot act arbitrarily and without reason and if it does, its action would be liable to be invalidated.
If the Government awards a contract of leases out or 149 otherwise deals with its property or grants any other largess, it would be liable to be tested for its validity on the touch-stone of reasonableness and public interest and if it fails to satisfy either test, it would be unconstitutional and invalid." Now coming to the test of reasonableness which pervades the constitutional scheme, this Court in several cases particularly with reference to Articles 14, 19 and 21 has considered this concept of reasonableness and has held that the same finds its positive manifestation and expression in the lofty ideal of social and economic justice which inspires and animates the Directive Principles and that Article 14 strikes at arbitrariness in State action. (vide Maneka Gandhi v. Union of India, [1978] 2 SCR 621 and E.P. Royappa v. State of Tamil Nadu & Anr. f 1974 12 SCR 348.
After referring to these decisions it was further held in Kasturi Lal Lakshmi Reddy's case (supra) as under:
"Any action taken by the Government with a view to giving effect to any one or more of the Directive Principles would ordinarily, subject to any constitutional or legal inhibitions or other over-riding- consid- erations qualify for being regarded as reasonable, while an action which is inconsistent with or runs counter to a Directive Principle would incur the reproach of being unreasonable. So also the concept of public interest must as far as possible receive its orientation from the Directive Principles. What according to the founding fathers constitutes the plainest requirement of public interest is set out in the Directive Principles and they embody par excellence the constitutional concept of public interest.
If, therefore, any governmental action is calculated to implement or give effect to a Directive Principle, it would ordinarily, subject to any other overriding considerations be informed with public interest. Where any government action fails to satisfy the test of reasonableness and public interest discussed above and is found to be wanting in the quality of reasonableness or lacking in the element of public interest, it would be liable to be 150 struck down as invalid. It must follow as a necessary corollary from this proposition that the Government cannot act in a manner which would benefit a private party at the cost of the State; such an action would be both unreasonable and contrary to public interest.
The Government therefore, cannot, for example give a contract or sell or lease out its property for a consideration less than the highest that can be obtained for it, unless of course there are other considerations which render it reasonable and in public interest t o do so. Such considerations many that some Directive Principle is sought to be advanced or implemented or that the contract or the property is given not with a view to earning revenue but for the purpose of carrying out a welfare scheme for the benefit of a particular group or secretion of people deserving it or that the person who has offered a higher consideration is not otherwise fit to be given the contract or the property. We have referred to these considerations only illustratively, for there may be an infinite variety of considerations which may have to be taken into account by the Government in formulating its policies and it is on a total evaluation of various considerations which have weighed with the Government in taking a particular action, that the Court would have to decide whether the action of the Government is reasonable and in public interest." (emphasis supplied) On the question of courts interference in an action taken by the Government, it was further observed as under:
"But one basic principle which must guide the Court in arriving at its determination on this question is that there is always a presumption that the Governmental action is reasonable and in public interest and it is for the party challenging its validity to show that it is wanting in reasonableness or is not informed with public interest. This burden is a heavy one and it has 151 to be discharged to the satisfaction of the Court by proper and adequate material. The Court cannot lightly assume that the action taken by the Government is unreasonable or without public interest because as we said above, there are a large number of policy considerations which must necessarily weigh with the Government in taking action and therefore the Court would not strike down government action as invalid on this ground, unless it is clearly satisfied that the action is unreasonable or not in public interest.
But where it is so satisfied, it would be the plainest duty of the Court under the Constitution to invalidate the governmental action. 'I-his is one of the most important functions of the Court and also one of the most essential for preservation of the rule of law." (emphasis supplied) On the question of the power of the Government in granting largess, it was also observed that:
"The second limitation on the discretion of the Government in grant of largess is in regard to the persons to whom such largess may be granted. It is now well settled as a result of the decision of this Court in Ramanad Shetty v.International Airport Authority of India & Ors. (supra) that the Government is not free like an ordinary individual, in selecting the recipients for its largess and it cannot choose to deal with any person it pleases in its absolute and unfettered discretion. The law is now well established that the Government need not deal with anyone, but if it does so, it must do so fairly without discrimination and without unfair procedure. where the Government is dealing with the public, whether by way of giving jobs or entering into contracts or granting other forms of largess, the Government cannot act arbitrarily at its sweet will and, like a private individual, deal with any person it pleases, but its action must be in conformity with some standard or norm which is not arbitrary, irrational or 152 irrelevant. The governmental action must not be arbitrary or capricious, but must be based on some principle which meets the test of reason and relevance. This rule was enunciated by the Court as a rule of administrative law and it was also validated by the Court as an emanation flowing directly from the doctrine of equality embodied in Art.
14." (emphasis supplied) In State of Uttar Pradesh and others v. Vijay Bahadur Singh and others [1982] 2 SCC 365 this Court considered the circumstances under which the Government is not always bound to accept the highest bid offered in a public auction under which a contract was to be awarded to fell trees and exploit forest produce and held as under:
"It appears to us that the High Court had clearly misdirected itself. The Conditions of Auction made it perfectly clear that (lie Government was under no obligation to accept the highest bid and that no rights accrued to the bidder merely because his bid happened to he the highest. Under condition 10 it was expressly provided that the acceptance of bid at the time of auction was entirely provisional and was subject to ratification by the competent authority, namely, the State Government. Therefore, the Government had the right, for good and sufficient reason, we may say, not to accept the highest bid but even to prefer a tenderer- other than the highest bidder. The High Court was clearly in error in holding that the Government could not refuse to accept the highest bid except on the ground of inadequacy of the bid. Condition 10 does not so restrict the power of the Government not to accept the bid. There is no reason why the, power vested in the Government to refuse to accept the highest bid should be confined to inadequacy of bid only. There may be a variety of good and sufficient reasons, apart from inadequacy of bids, which may impel the Government not to accept the highest bid.
In fact, to give an antithetic illustration, the very enormity of a bid may make 153 it suspect. It may lead the Government to realise that no bonafide bidder could possibly offer such a bid if he meant to do honest business. Again the Government may change or refuse its policy from time to time and we see no reason why change of policy by the Govern- ment, subsequent to the auction but before its confirmation, may not be a sufficient justification for the refusal to accept the highest bid. It cannot be dispute that the Government has the right to change its policy from time to time, according to the demands of the time and situation and in the public interest. If the government has the power to accept or not to accept the highest hid and if the Government has also the power to change its policy from time to time. it must follow that a change or revision of policy subsequent to the provisional acceptance of the bid but before its final acceptance is a sound enough reason for the Government's refusal to accept the highest bid at an auction. that is precisely what has happened here." (emphasis supplied) In State of Orissa and Ors. v. Harinarayan Jaiswal and Ors. [1972] 3 SCR 784 it was observed as under:
"It is for the Government to decide whether the pi-ice offered in an auction sale is adequate. While accepting or rejecting a bid, it is merely performed and executive function.
The correctness of its conclusion is not open 'to judicial review. We fail to see how the plea of contravention of Art. 19 (1) (g) or Art. 14 can arise in these cases. The Government's power to sell the exclusive privileges set out in s. 22 was not denied.
It was also not disputed that those privileges could be sold by public auction. Public auctions are held to get the best possible price. Once these aspects are recognised, there appears to be no basis for contending that the owner of the privileges in question who had offered to sell then cannot decline to accept the highest bid if he thinks that the price offered is inadequate. There is no 154 concluded contract till the bid is accepted.
Before there was a concluded contract, it was open to the bidders to withdraw their bids-see Union of India and ors. v. M/s Bhimsen Walaiti Rani [1970] 2 SCR 594. By merely giving bids, the bidders had not acquired any vested rights. The fact that the Government was the seller does not change the legal position once its exclusive right to deal with those privileges is conceded. If the Government is the exclusive owner of those privileges, reliance on Art. 19 (1) (g) or Art. 14 becomes irrelevant. Citizens cannot have any funda- mental right to trade or carry on business in the properties or rights belonging to the Government, nor can there he any infringement of Art. 14, if the Government tries to get the best available price for its valuable rights." emphasis supplied) In G.B. Mahajan and others v. Jalgaon Municipal Council and others [1991] 3 SCC 91 it was observed thus:
" The reasonableness' in administrative law must, therefore, distinguish between proper use and improper abuse of power. Nor is the test the court's own standard of 'reasonableness' as it might conceive it in a given situation." In State of Madhay Pradesh & ors v. Nandlal Jaiswal & ors.
[1987] 1 SCR 1 it was observed thus:
" We must not forget that in complex economic matters every decision is necessarily empiric and it is based on experimentation or what one may call 'trial and error method' and, therefore, its validity cannot be tested on any rigid a priori' considerations or on the application of any straight-jacket formula.
The court must while adjudging the constitutional validity of an executive decision relating to economic matters grant a certain measure of freedom or play in the 155 'joints' to the executive.
xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxxx The Court cannot strike down a policy decision taken by the State Government merely because it feels that another policy decision would have been fairer or wiser or more scientific or logical. The Court can interfere only if the policy decision is patently arbitrary, discriminatory or mala fide. It is against the back-round of these observations and keeping the mind that we must now proceed to deal with the contention of the petitioners based on article 14 of the Constitution." In India Cement Ltd. and others v. Union of India and others[1990] 4SCC 356 a question arose whether the fixation of Rs. 100 per tonne of cement as the uniform retention price for the entire industry with the exception of M/s Travancore Cement Ltd. was rational and reasonable. This Court held as under:
"It is. therefore, clear that fixation of Rs.100 per tonne as die uniform retention price for the entire industry with the solitary exception of M/s. Travancore Cement Ltd.
Kottayam for which justification has been shown. was on a rational basis taking into account all relevant data and factors including the cement industry's acceptance of the principle of a uniform retention price for the entire industry. the only difference being in die price actually fixed it Rs. 100 per tonne instead of Rs. 104 per tonne claimed by the cement industry. It is obvious that the fixation of Rs. 100 per tonne being shown to be made on a principle which has not been faulted. the actual fixation of Rs. 100 instead of Rs. 104 to be received by the industry is not within the domain of permissible judicial review, if the principle of a Uniform retention price for the entire industry cannot be faulted.
(emphasis supplied) The Bench in die above case, after referring to die decision of the Constitution 156 Bench in Shri Sitaram Sugar Co. Lid. v. Union of India [1990] 3 SCC 223, observed thus:
" It was pointed out that what is best for the industry and in what manner the policy should be formulated and implemented. hearing in mind the object of supply and equitable distribution of the commodity at a fair price in the best interest of the general public, is a matter for decision exclusively within the province of the Central Government and such matters do not ordinarily attract the power of judicial review. It was also held (hit even if some persons are at a disadvantage and have suffered losses on account of the formulation and implementation of the government policy.
that is not by itself' sufficient ground for interference with the governmental action.
Rejection of the principle of fixation of price unit wise on actual cost basis of' each unit was reiterated and it was pointed out that such a policy promotes efficiency and provides and incentive to cut down the cost introducing an element of healthy competition among the units.
xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxxx It is. therefore. clear that the principle of fixation of uniform price for the industry is an accepted principle and this has to be done by fixing a uniform price on the basis of the cost of a reasonably efficient and economic representative cross-section of manufacturing units and not with reference to the cost in relation to each unit. Obviously, such a practice is in larger public interest and also promotes efficiency in the industry providing an incentive to the uneconomic units to achieve efficiency and to reduce their cost." Regarding the differential treatment given to M/s Travancore Cement Ltd. this Court held that:
157 The only surviving question for consideration is the argument in Civil Appeal No. 2193 of 1972 for a differential treatment to the appellant, M/s Chettinad cement Limited, on the anology of M/s Travancore Cement Ltd., Kottayam. In the counter-affidavit of Shri G. Ramanathan Under Secretary to the Government of India, the reason for treating. Travancore Cement Limited differently has been clearly stated. It has been stated that it is a sub- standard unit with a capacity of 50,000 tonnes `per annum only without any scope for expansion while the standard capacity for a unit is two lakh tonnes per annum; so that this unit is not capable of expanding the capacity and it is on the whole an uneconomic unit deserving a special consideration. No material has been produced by the appellant.
M/s Chettinad Cement Corporation Limited. to show that it is a similar substandard uni t without any capacity for expansion. so that it too must continue to be an uneconomic unit like M/s Travancore Cement Limited, Kottayam deserving, a similar treatment. The counter affidavit. therefore. shows a rational basis for classifying M/s Travancore Cement Limited, Kottayam differently as a sub-standard and an uneconomic unit without any scope for improvement in comparison to other units.
This argument also is untenable." In R.K. Garg v. Union of India, [1981]4 SCC 675, a Constitution Bench of this Court observed as under:
" Another rule of equal importance is that laws relating to economic activities should be viewed with greater latitude. than laws touching the civil rights such as freedom of speech religion etc. It has been said by no less a person than Holmes, J. that the legislature should be allowed some play in the joints, because it has to deal with complex problems which do not admit of solution through any doctrinaire or strait-.jacket formula and this is particularly true in case of legisla- 158 (ion dealing with economic matters, where having regard to the nature of the problems required to be dealt with. greater play in the joints has to he allowed to tile legislature.
The Court should feel more inclined to give judicial deference to legislative judgment in the field of economic regulation then in other areas where fundamental
