ivil Appeal No 1027 of 1990
From the Judgment and Order dated 27101989 of the Karnataka High Court in Writ Appeal No 2017 of 1989
K Parasaran CS Vaidyanatha SR Bhat SR Setia KV Mohan and Mrs Sunitha B Singh for the Petitioner
KN Bhatt Rajinder Sachhar Vineet Kumar B Mohan and KG Raghvan for the Respondents
The Judgment of the Court was delivered by RANGANATHAN J
The petitioner is aggrieved by the award of a contract by the Karnataka Power Corporation Ltd KPC an instrumentality of the State of Karnataka in favour of the Mysore Construction Co MCC
His writ petition and a further writ appeal in the Karnataka High Court having been unsuccessful he has preferred this Spe cial Leave Petition from the judgment of the High Court in the writ appeal
We have heard counsel for both sides at length
We 231 grant Special leave and proceed to dispose of the appeal
Though at an earlier stage of the proceedings there were some allegations of favoritism the plea of the peti tioner as urged before us is that the KPC should not at all have entertained the tender of MCC as the MCC did not fulfill certain preliminary requirements which under the Notification Inviting Tenders NIT had to be ful filled even before the forms of tender could be supplied to any intending contractor
The contract pertained to the construction of a Main Station Building of a Power House at the Raichur Thermal Power Plant at an estimated cost of about Rs 18 crores
The NIT dated 27121988 invited tenders from registered contractors of appropriate class
Paragraph I of the notifi cation listed three Minimum qualifying requirements viz that the intending tenderer 1 should have executed civil and architectural works including insulation in a power plantindustrial complex preferably in power plant 2 should have executed atleast 1000 cubic metres per month of concrete pouring and atleast 300 cubic metres per month of brick work at one site and 3 should have had an annual turnover of atleast 1 crore for each of the preceding three years
Para V required the intending tenderers to furnish the following information along with the application for issue of blank tender books namely a Audited Balance SheetCertificate from Chartered Ac countant for preceding three years b Latest income tax clearance Certificate c Copy of the Registration Certificate d Annual output of the works of all the above nature at any site accompanied by a certificate from the organisation for whom the tenderer had carried out the works furnishing details such as rate of pouring of concrete
manufacturing of hollow concrete 232 block precast concrete block   etc and period of completion scheduledenvisaged equipments and their deploy ment ie man months etc
The NIT specified January 17 1989 as the last date for receipt application forms for issue of blank tender books
The issue of blank tender books was to be between 23rd January to 27th January 1989 and the completed tender books had to be submitted by 300 pm on 6289
It is common ground however that subsequently this time frame was altered
The last date for receipt of application form for issue of blank tender books remained as 17th January 1989 but the other items were altered to read as follows 1
Last date for receipt of 10289 clarification 2
Period to issue blank tender 10289 to books 16289 3
Last date and time for receipt 27289 completed tender books upto 300 PM
It appears that six parties applied for tender books
These were scrutinized with reference to the pre qualifying requirements and data on experience work done etc
as furnished by each of the applicants
Four of the firms were found to be pre qualified by the Chief Engineer and tender books were issued to them
Only three of them however submitted completed tender books by February 27 1989
These tenders were examined by the Chief Engineer as well as an independent firm of Engineering Consultants namely Tata Consulting Engineers TCE
Both the Chief Engineer as well as TCE recommended acceptance of the tender of MCC which was the lowest tender in view of the fact that MCC had adequate experience in the construction of RCC works and they were capable of mobilising the work force required for the work
It may be mentioned that after making necessary adjustments it was found that the tender of MCC was Rs 15 lakhs less than the tender of the peti tioner
The principal argument advanced on behalf of the peti tioner is that paragraphs I and V of the NIT specified certain pre qualifying requirements
Unless these require ments were fulfilled the contractor was not even entitled to be supplied with a set of tender documents
It is submit ted that MCC did not comply with these requirements and 233 hence its application for tender forms should have been rejected at the outset
The learned single Judge in the High Court went into the matter in great detail and came to the conclusion that the petitioner s contentions were not well founded
He took the view that the pre requisites for supply of tender forms were only the three conditions set out in para I of the NIT and that the details called for in para V could be supplied at any time
He therefore rejected the petitioner s con tention that the extensions of time given to MCC to submit the tender with requisite clarifications were not warranted
The Division Bench on appeal did not express any clear opinion as to the nature of the requirements set out in Para V but was satisfied on an overall view that there was nothing unfair or arbitrary about the award of the contract tO the MCC It observed We have carefully considered these contentions
We are of the view that while exercising jurisdiction under Article 226 of the Constitution it is not for us to reap praise the facts on merits and come to one conclusion or other with regard to these aspects of the matter
Why we are obliged to say this is if the Court is satisfied there is nothing arbitrary or unfair in the award of the contract it cannot convert itself into a super technical Committee and find out whether the requirements have been fulfilled or not
While saying so we are conscious of the fact that what is argued before the learned single Judge is with reference to prequalifications or in other words the eligibility
Nevertheless where the person who is incharge of award of contract was satisfied about the eligibility and that too after consultancy through an independent agency like Tata s we cannot come to a contrary conclusion and then say a particular certificate does not in terms meet the require ment laid down under clause Vd
That we consider is no function of the Court
After all the object of tender in most matters like this is to satisfy the authority that the person who undertakes to execute the work or the person who offers the tender would be really worth and then he would perform to the best of his ability and to the requirement of the person who wants to have the contract
If these basic principles are kept in mind we do not think we can intro duce nuances of law to enter into the realm of contract which we consider should be kept out of the purview of writ 234 jurisdiction
From this point of view we are unable to find out any justification to interfere with the order of the learned single Judge
 The first question that falls to be considered is as to whether there is any difference between the requirements in paras I and V and whether only para I and not para V sets out the pre conditions of eligibility to submit a tender for the contract
In our opinion it is difficult to accept the view of the learned single Judge of the High Court that it is only para I that stipulates the pre conditions and that all the documents referred to in the other paras can be supplied at any time before the final award of the contract
It is seen that paras I to XIII set out various terms and conditions some of which relate to the pre tender stage and some to later stage
For instance paras X and XI come into operation only after the tenders are received and para XII makes it clear that the KPC s decision regarding the fulfilment of para IV may remain open right till the actual award of the contract
However on the contrary the condi tion set out in para VI has clearly to be fulfilled even before asking for tender forms
Para V seems to stand some where in between
If one reads paras I and V together it will be seen that a common thread runs through them and that they are really meant to supplement each other
It is in order to satisfy itself that the requirements of para I1 and 2 are fulfilled that the KPC calls for the certifi cates mentioned in para V and the fulfilment of the require ment in para I3 has obviously to be verified by reference to the audited balance sheets called for under clause a of para V
The reference in clause d of para V to the annual output of the works of the above nature is also obviously a reference to the works of the nature described in para I
It is clear that at least some if not all of the documents referred to in para V are intended to verify the fulfilment of the three prequalifying requirements of para I The stipulation of the time element within which the information asked for in para V should be supplied is also of some significance it specifically requires the information to be supplied along with the application for tender forms
As pointed out by this Court in its judgment dated 331989 in Ram Gajadher Nishad vs State of UP CA 181989 an intending tenderer can be perhaps letigimately excluded from consideration for a contract if the certificates such as the ones under clauses b and c of para V are not fur nished
It may not therefore be correct to read para I in isolation and treat it as the only condition precedent for the supply of forms of tender
The more harmonious and practical way of construing the NIT is by saying that before the tender books can be supplied an intending ten derer should satisfy the KPC by supplying such of the documents called for in para V as are material in assessing the fulfilment of the condition in para I that he fulfills the three 235 conditions set out in para I
It seems clear to us that apart from para I there are some other requirements in the NIT which have to be complied with before the applicant can be eligible for supply of tender forms
These include if not all at least such of those documents referred to in para Vd as have a direct bearing on the three conditions outlined in para I Bearing this approach in mind let us examine to what extent according to the appellants the MCC failed to fulfil the NIT requirements So far as para I is concerned two defects were pointed out
The first was that as against the requirement that the applicant should have executed   works including insulation the certificate of 2511989 produced by the MCC was only to the effect that it is constructing a building in Hyderabad for the National Geophysical Research Institute in which they have done wall insulation and roof insulation for airconditioning work
The second was that as against the second requirement of para I that the appli cant should have executed at least 300 cubic metres per month of brick work at one site the certificate from Vasa vadatta Cements produced by the MCC on 1289 only stated that it had constructed over 300 cubic meter of brick masonry for the packing plant and DG building totaling to 32729 cubic metre during the month of June 1985
These certificates it is submitted do not come up to the re quirements of Para I
We think that this criticism based on the differences in wording as between the language of para I and the certificates produced by the MCC is too weak to be accepted
It was for the KPC to consider the suffi ciency of these certificates
The conditions only required that the applicant should supply information to show that he had experienced in insulation work and that he could carry out brick work in a month to the extent indicated
It was for the KPC to assess the value of the certificates furnished in this regard and if the KPC considered them sufficient to warrant the issue of a tender form to the applicant we do not think we should interfere with their decision
So far as para V is concerned the criticism is that two items of information concerning the requirements of clause d of Para V were not supplied along with the request for application of tender formsbut were supplied much later
It was only on 21689 that MCC furnished a certificate that they had executed hollow cement blocks work for the Indian Telephone Industries Ltd but even that certificate gave no details
It vaguely stated that the item had been executed as per our bill of quantities
Again it was only on 18889 that MCC produced a certificate from Vasvadatta Cements regarding the work of concreting done by it
It is pointed out incidentally that 236 this is also a part of the specific requirements in para I and as such the VICC cannot be said to have satisfied the preliminary conditions Tendering it eligible to tender for the contract
The second of these does not really cause much difficulty
For even as early as 11189 along with its application for tender dated 3189 MCC had produced a certificate from the KPC itself that it had done 35000 cubic metres of concreting during 7 months and this was apparently considered sufficient for the KPC subsequently called for a certificate only regarding brick work
This leaves only the first of the criticisms that the details regarding hollow cement block works done by the MCC was furnished only on 21589
Should the MCC have been denied altogether the right to Tender for the contract consequent on the delay in sub mitting this document is the second question that arises for consideration
Sri Parasaran for the appellant would have us answer this question in the affirmative on the principle enunciated by Frankfurter J and approved by this Court in Raman Daygram Sherry vs The International Airport Authority of India  Ors  Bhagwati J as his Lordship then was formulated in the following words a principle which has since been applied by this Court in a number of cases It is a well settled rule of administrative law that an executive authority must be rigorously held to the standards by which it professes its actions to be judged and it must scrupulously observe those standards on pain of invalidation of an act in violation of them
This rule was enunciated by Mr Justice Frankfurter in Viteralli vs Seton 359 US 5353 Law
Second series 1012 where the learned Judge said An executive agency must be rigorously held to the standards by which it professes its action to be judged
Accordingly if dismissal from employment is based on a defined procedure even though generous beyond the require ments that bind such agency that procedure must be scrupu lously observed
This judicially evolved rule of administra tive law is now add rightly so
He that takes the procedur al sword shall perish with the sword This Court accepted the rule as valid and applicable in India in AS Ahluwalia vs Punjab  and in subsequent decision given in Sukhdev vs Bhagatram  Mathew J quoted the above referred observations of Mr Justice Frankfurter with approval
It may be noted that this rule though supportable also as emanation 237 from Article 14 does not rest merely on mat article
It has an independent existence apart from Article 14
It is a rule of administrative law which has been judicially evolved as a check against exercise of arbitrary power by the executive authority
If we turn to the judgment of Mr Justice Frank furter and examine it we find that he has not sought to draw support for the rule from the equality clause of the United States Constitution but evolved it purely as a rule of administrative law
Even in England the recent trend in administrative law is in that direction as is evident from what is stated at pages 540 41 in Prof Wade s Administra tive Law 4th edition
There is no reason why we should hesitate to adopt this rule as a part of our continually expanding administrative law
XXX XXX XXX It is therefore obvious that both having regard to the constitutional mandate of Article 14 as also the judicially evolved rule of administrative law the 1st respondent was not entitled to act arbitrarily in accepting the tender of the 4th respondents but was bound to conform to the stand ard or norm laid down in paragraph I of the notice inviting tenders which required that only a person running a regis tered
Find II Class hotel or restaurant and having at least 5 years  experience as such should be eligible to tender
It was not the contention of the appellant that this standard or norm prescribed by the 1st respondent was dis criminatory having no just or reasonable relation to the object of inviting tenders namely to award the contract to a sufficiently experienced person who would be able to run efficiently a find class restaurant at the airport
Admit tedly the standard or norm was reasonable and non discrimi natory and once such a standard or norm for running a Find Class restaurant should be awarded was laid down the 1st respondent was not entitled to depart from it and to award the contract to the 4th respondents who did not satisfy the condition of eligibility prescribed by the standard or norm
If there was no acceptable tender from a person who satis fied the condition of eligibility the 1st respondent could have rejected the tenders and invited fresh tenders on the basis of a less stringent standard or norm but it could not depart from the standard or norm prescribed by it and arbi trarily accept the tender of the 4th respondents
When the 1st respondent entertained the tender of the 4th respondents even though they did not have 5 years  expe 238 rience of running a II Class restaurant or hotel denied equality of opportunity to others similarly situate in the matter of tendering for the contract
There might have been many other persons in fact the appellant himself claimed to be one such person who did not have 5 years  experience of running a II Class restaurant but who were otherwise compe tent to run such a restaurant and they might also have competed with the 4th respondents for obtaining the con tract but they were precluded from doing so by the condi tion of eligibility requiring five years  experience
The action of the 1st respondent in accepting the tender of the 4th respondents even though they did not satisfy the pre scribed condition of eligibility was clearly discriminato ry since it excluded other person similarly situate from tendering for the contract and it was plainly arbitrary and without reason
The acceptance of the tender of the 4th respondents was in the circumstances invalid as being violative of the equality clause of the Constitution as also of the rule of administrative law inhibiting arbitrary action Shri Vaidyanathan who supplemented the arguments for the petitioner contended that this rule has been demonstra bly infringed in the present case even on the KPC s own showing
He cited two documents filed by the KPC to substantiate this contention
The first is A note on the tendering system in KPC which inter alia reads 200 Brief tender notification containing description of the work estimated cost of the work period of completion and the minimum prequalifyingeligibility conditions required and other general requirements such as the value fashion of CMD to be furnished latest certificates works and furnishing of audited balance sheet etc
 duly indicating the dates for issuing and receipt of tenders is widely circulated and also advertised in leading newspapers for the information of the intending tenderers
Where prequalifying conditions are notified in the notification the applications for the issue of tenders is carefully scrutinised with reference to these requirements and the tenders will be issued to those who comply with all the prequalifying eligibility requirements
Apart from the prequalifying conditions contained in the brief tender notification certain general requirements as described above will also be looked into
any deficiency in the gener al requirements 239 will however not disqualify the tenderers from receiving the tender books as these conditions could be satisfied prior to acceptance of the successful tender
Any clarifica tions required on the prequalifying requirementsgeneral requirements will also be obtained before issue of tender documents from the intending tenderers
The tenders will be issued to those tenderers who comply with the prequalifying conditions
The second is the record of minutes showing what they actu ally did 5701 There was extended discussion on the issue
CMD also informed that one of the tenderers had sent a represen tation objecting to the consideration of the tender of Ms MCC on the ground that they had not fulfilled the prequalifying requirements
There was a discussion as to whether the stipulations mentioned in the NIT other than those stipulated under prequalifying conditions have to be mandatorily fulfilled before the tenders were filed
It was clarified that only three prequalifying conditions were prescribed in the NIT and other details called for vide para 5c of NIT were only for information and are such they could be met before consideration of the tenders
It was clarified that while tenders which did not meet minimum prequalifying conditions were not eligible to be considered at all any shortcoming in furnishing the details at the time of tendering would not disqualify the tenderer from bidding for the work so long as the conditions could be met before finalisation of the award
It was further clarified that the word shall  used in the NIT has been the normal practice in all tenders and agreement clauses and the deci sion of the KPC and the application other than the mini mum qualifying requirement should be prerogative of KPC only
It was informed that the practice in KPC so far has been to go by the minimum qualifying requirements as stated in the NIT and the rest of the information were only for assessing the capabilities of the tenderers as well as their eligibility and simply because Mr GJ Fernandez has made a complaint it would not be proper to deviate from this estab lished procedure
As per clause 11 the Corporation reserves the fight to reject or accept the tender without assigning any reasons
In this particular case the lacuna in furnish ing the information has been set right subsequently by the tenderer before opening of the price documents the Chief Engineer had 240 come to the conclusion that the firm had fulfilled all the prequalifying requirements and as such the tender of Ms MCC had been found to be in order
It was also clarified by GMT that the use of cement hollow block masonry may not be required at all and instead the brick masonry may be used as this item of work was essentially for a filler wall and the walls would be non load bearing
It was clarified that those who were prequalified had satisfied the condition with regard to quantity of brick masonry work
5702 Under the circumstances the Committee recommended entrustment of work to Ms MCC at their quoted rates amounting to Rs20939 lakhs together with their stipulation regarding release of security deposit against furnishing bank guarantee
5703 However it was decided that in future it should be made clear that only prequalifying conditions would be mandatory
 These two documents particularly the last sentence of the second one clearly show Shri Vaidyanathan urged that the KPC had relaxed its NIT standards in favour of the MCC Interesting as this argument is we do not see much force in it
In the first place although as we have ex plained above para V cannot but be read with para I and that the supply of some of the documents referred to in para V is indispensable to assess whether the applicant fulfills the prequalifying requirements set out in para I it will be too extreme to hold that the omission to supply every small detail referred in para V would affect the eligibility under para I and disqualify the tenderer
The question how far the delayed supply or omission to supply any one or more of the details referred to therein will affect any of the prequalifying conditions is a matter which it is for the KPC to assess
We have seen that the documents having a direct learning on para I viz regarding output of concrete and brick work had been supplied in time
The delay was only in supplying the details regarding hollow cement blocks and to what extent this lacuna effected the conditions in para I was for the KPC to assess
The minutes relied upon show that after getting a clarification from the General Manager Technical the conclusion was reached that the use of cement hollow block masonry may not be required at all and instead the brick masonry may be used
In other words the contract was unlikely to need any work in hollow cement blocks and so the documents in question was consid ered to be of no importance in judging the pre qualifying requirements
There is nothing wrong with this 241 particularly as this document was eventually supplied
Secondly whatever may be the interpretation that a court may place on the NIT the way in which the tender documents issued by it has been understood and implemented by the KPC is explained in its note which sets out the general procedure which the KPC was following in regard to NITs issued by it from time to time
Para 200 of the note makes it clear that the KPC took the view that para I alone incorporated the minimum prequalifyingeligi bility conditions and the data called for under para V was in the nature general requirements
It further clarifies that while tenders will be issued only to those who comply with the prequalifying conditions any deficiency in the general requirements will not disqualify the applicant from receiving tender documents and that data regarding these requirements could be supplied later
Right or wrong this was the way they had understood the standard stipulations and on the basis of which it had processed the applications for contracts all along
The minutes show that they did not deviate or want to deviate from this established procedure in regard to this contract but on the contrary decided to adhere to it even in regard to this contract
They only decided in view of the contentions raised by the appellant that para V should also be treated as part of the prequali fying conditions that they would make it specific and clear in their future NITs that only the fulfilment of prequal ifying conditions would be mandatory
If a party has been consistently and bona fide interpreting the standards pre scribed by it in a particular manner we do not think this Court should interfere though it may be inclined to read or construe the conditions differently
We are therefore of opinion that the High Court was right in declining to inter fere
Thirdly the conditions and stipulations in a tender notice like this have two types of consequences
The first is that the party issuing the tender has the right to punc tiliously and rigidly enforce them
Thus if a party does not strictly comply with the requirements of paras III V or VI of the NIT it is open to the KPC to decline to consider the party for the contract and if a party comes to Court saying that the KPC should be stopped from doing so the Court will decline relief
The second consequence indicatedby this Court in earlier decisions is not that the KPC cannot deviate from these guidelines at all in any situation but that any deviation if made should not result in arbitrariness or discrimination
It comes in for application where the non conformity with or relaxation from the prescribed standards results in some substantial prejudice or injustice to any of the parties involved or to public interest in general
For example in this very case the KPC made some changes in the time frame origi 242 nally prescribed
These changes affected all intending applicants alike and were not objectionable
In the same way changes or relaxations in other directions would be unobjectionable unless the benefit of those changes or relaxations were extended to some but denied to others
The fact that a document was belatedly entertained from one of the applicants will cause substantial prejudice to another party who wanted likewise an extension of time for filing a similar certificate or document but was declined the benefit
It may perhaps be said to cause prejudice also to a party which can show that it had refrained from applying for the tender documents only because it thought it would not be able to produce the document by the time stipulated but would have applied had it known that the rule was likely to be relaxed
But neither of these situations is present here
Sri Vaidhyanathan says that in this case one of the appli cants was excluded at the preliminary stage
But it is not known on what grounds that application was rejected nor has that party come to Court with any such grievance
The ques tion then is whether the course adopted by the KPC has caused any real prejudice to the appellant and other parties who had already supplied all the documents in time and sought no extension at all It is true that the relaxations of the time schedule in the case of one party does affect even such a person in the sense that he would otherwise have had one competitor less
But we are inclined to agree with the respondent s contention that while the rule in Ramana s case supra will be readily applied by Courts to a case where a person complains that a departure from the qualifi cations has kept him out of the race injustice is less apparent where the attempt of the applicant before Court is only to gain immunity from competition
Assuming for pur poses of argument that there has been a slight deviation from the terms of the NIT it has not deprived the appellant of its right to be considered for the contract on the other hand its tender has received due and full consideration
If save for the delay in filing one of the relevant docu ments MCC is also found to be qualified to tender for the contract no injustice can be said to have been done to the appellant by the consideration of its tender side by side with that of the MCC and in the KPC going in for a choice of the better on the merits
The appellant had no doubt also urged that the MCC had no experience in this line of work and that the appellant was much better quali fied for the contract
The comparative merits of the appel lant vis a vis MCC are however a matter for the KPC counselled by the TCE to decide and not for the Courts
We were therefore rightly not called upon to go into this question
For the reasons discussed above this appeal fails and is dismissed
But we make no order as to costs
RNJ Appeal dis missed


Summary:
Respondent instituted a suit against the appellant the Coal Mines Provident Fund Commissioner without a notice as required under section 80 CPC Appellant objected stating that he was a public officer within the meaning of the term occurring in section 80 CPC and that the suit was incom petent
The trial court overruled the objection and held that the appellant was not a public officer
The High Court confirmed the same
Aggrieved the appellant has preferred this appeal by special leave
Allowing the appeal this Court HELD 1
I The courts below have erred in holding that the Coal Mines Provident Fund Commissioner is not a public officer within the meaning of the term in section 217h of the CPC
The word service  in section 2 17h CPC must necessarily mean something more than being merely subject to the orders of Government or control of the Gov ernment
To serve means to perform function do what is required for
The Commissioner appointed by Government performs the functions as envisaged in the Act and the scheme thereunder
When he is actually acting in the capaci ty of Provident Fund Commissioner he does not cease to be an officer in the service of the Government
184E F 185F 12 The fact that the Commissioner receives the salary and allowances out of the Coal Mines Provident Fund and not from the Government during the tenure as Commissioner would make no difference when the description as an officer in the service of the Government is answered
184D 182 2
In the present case the Provident Fund Commissioner holds the office of Commissioner on appointment by Govern ment by virtue of his office
His services are temporarily placed at the disposal of the Board constituted under Sec tion 3 of the 
He does not therefore cease to be an officer in the service of the Government
The payment of his pay out of the Fund does not alter his status as Government employee
185E Liquidator of Society Sangakheda Kalan Co Operative Bank Hoshangabad vs Ayodhyaprasad Shiamlal  Kuppu Govinda Chattiar vs Uttukottai Co Operative Society AIR 1940 Madras 831 Vishnu Wasudeo Joshi vs TLH Smith Pearse AIR 1949 Nagpur 362 Commissioner of Wakfs Bengal vs Shahebzada Mohammed Zahangir Shah AIR 1944 Cal cutta 206 and Kamta Prasad Singh vs The Regional Manager FCI AIR 1974 Patna 376 referred to