WP(C) 2120/2007 BEFORE THE HON’BLE MR JUSTICE AFTAB H. SAIKIA JUDGMENT AND ORDER ( oral ) Heard Mr. A.M.Mazumdar, learned Sr. counsel assisted by Ms. D.Borgohain, learned counsel appearing for the petitioner. Also heard Mr. A.K.Phukan, learne d Sr. counsel assisted by Mr. J. Roy, learned counsel appearing for the Hindust an Paper Corporation Limited,(for short, ’the HPC’)/respondents. 2. The short point that has been raised herein for resolution of this Cour t is as to whether Account Payee Pay Order issued from Dena Bank, Panbazar Bran ch, Guwahati submitted as earnest money enclosed with the tender paper pursuan t to Notice Inviting Tender (for short, ’the NIT’) dated 26.3.2007 floated by t he HPC for awarding the contract work for Transportation, Bundling and Feeding o f Bamboo in violation of the terms and condition so stipulated in clause 2.1.3.1 of the NIT which provides that ’Earnest Money as mentioned in the NIT is to be deposited in the form of Demand Draft/Call Deposit drawn in favour of Hindustan Paper Corporation Limited, Nagaon Paper Mill, Kagajnagar and issued from any bra nches of State Bank of India/ Canara Bank/Central Bank of India and payable at S tate Bank of India Sonakukchi (HPC) ( Code: 7699)/ or Canara Bank, Jagiroad (co de : 1436), with specific clause incorporated therein that ’Demand Drafts of a ny associated Banks of State Bank of India shall not be accepted’ can be accept ed by the HPC. 3. The pleaded case of the petitioner is that inspite of deposit of Earnest Money as stipulated in the NIT as mentioned above, the petitioner’s tender pape r has not been considered by the HPC and such act itself is in violation of Arti cle 14 of the Constitution of India. It is contended that due to paucity of ti me, as averred in paragraph- 6 of the writ petition, he could not get the Dem and Draft from the State Bank of India Panchgram Branch and instead obtained an Account Payee Pay Order from Dena Bank, Panbazar Branch, Guwahati for an amou nt of Rs.5,00,000.00 (Rupees five laksh) drawn in favour of HPC vide Pay Order N o. 805825 dated 16.4.2007 and accordingly he deposited the same along with ten der bid as Earnest Money. However, the HPC instead of accepting the same, has refused to open the tender paper on the ground of non deposit of Demand Draft /Call Deposit to be issued from those Banks as stipulated in the NIT noted ab ove. 4. Challenging such attitude/ action of the HPC/respondents refusing to open the tender paper accompanied by Earnest Money so deposited by the petitione r in the above form /mode, the learned Sr. Counsel Mr. Mazumdar has submitted t hat Earnest Money so deposited by way of Account Payee Pay Order is a valid de posit and acceptance of the same cannot be denied by the authority under the l aw and such action has apparently reflected arbitrariness, high handedness and nepotism on the part of the HPC. Under such factual premises, the HPC may be dir ected to accept and open the tender paper of the petitioner. 5. To bolster up his submission, learned Sr. Counsel has relied upon a de cision of the Apex Court reported in AIR 1991 SC 1579 ( M/s Poddar Steel Co rporation Vs. M/s Ganesh Engineering Works and others ) wherein, according to the learned Sr. Counsel, in a similar situation the deposit of Earnest Mone y by certified cheque drawn on Union Bank of India instead of stipulated terms for deposit of Earnest Money by Demand Draft issued by State Bank of India was rejected. The Supreme Court in paragraph 6 held that the authority should not insist upon on the strict literal compliance of the condition in appropriate cases and it must be open to the authority to deviate from such required cond ition in submission of tender paper. It was further observed that requireme nt in a tender notice could be classified in two categories - those which laid d own essential conditions of eligibility and the others which were merely ancill ary or subsidiary with the main object to be achieved by the condition. 6. According to Mr. Mazumdar, the submission of deposit of Earnest Money f alls in the second category of above mentioned requirement in the tender noti ce. In other words according to him, the deposit of Earnest Money by Demand Dra ft/Call Deposit as stipulated in the NIT is merely ancillary or subsidiary with the main object to be achieved by condition and that being so, in view of the above judicial pronouncement, the learned Sr. Counsel has forcefully argued th at his Earnest Money deposited through the Dena Bank, Panbazar Branch, Guwahati by mode Account Payee Pay Order needs to be accepted by the authority as the s ame is valid in the eye of law. Be it noted that in the above referred case, the Supreme Court directed that the certified cheque of the Union Bank of Union Ba nk of India must be treated as sufficient for achieving object of the condition of the NIT. 7. Discarding and refuting the submissions so made by the learned Sr. couns el, by Mr. Mazumdar on behalf of the petitioner, Mr. Phukan, learned Sr. Counsel appearing on behalf of the HPC/respondents, has strenuously submitted that the contract so floated by HPC itself is a commercial transaction and to carry out such commercial transaction, a duty has been cast upon the HPC to act judic iously, reasonably and fairly and to achieve such mandate, liberty must be give n to them to put any such terms and conditions which are in the public interest and also not violative of Article 14 of the Constitution of India. In the inst ant case, according to Mr. Phukan, while incorporating the condition of depos it of Earnest Money by way of Demand Draft/Call Deposit as already stated abov e the consequential condition has also been inserted thereto to the effect that Demand Draft if deposited from any other associate Bank other than the Stat e Bank of India cannot be accepted and this specific term and condition has, therefore, become a mandatory provision and once it is accepted as a manda tory provision, no body can be permitted to violate such term and condition an d as such compliance of the same is a must. 8. Distinguishing Poddar Steel Corporation’s case (supra), it is submitt ed by the learned Sr. Counsel, Mr. Phukan , that in the cited case no such cl ause indicating the consequence to have the effect of cancellation/rejection of the tender, was incorporated in acceptance of cheques from other Bank instead the State Bank of India in terms of Clause 6 of the Tender Notice. However in t he case in hand, specific consequential condition has been laid down in NIT itse lf . His case is that the Supreme Court in paragraphs 6 and 8 ruled that the c ertified cheque of the Union Bank of India so deposited by the appellant must be treated as sufficient for the purpose of achieving the object of the condition. In the instant case the clause 2.1.3.1 specifically and categorically contempla tes that Earnest Money has to be deposited in the form of Demand Draft/Call De posit issued from any Branch of State Bank of India , Central Bank of India wi th consequence that Demand Draft from any associated Banks of State Bank of In dia shall not be accepted. That being so, the term and condition of the NIT in the instant case in hand is clear and unambiguous. But the petitioner instead of complying the same, has fallen back upon on an Account Payee Pay Order dra wn on Dena Bank , Panbazar Branch and the same is, according to him, is a cle ar deviation from the stipulated term and condition. 9. The extensive arguments canvassed on behalf of the contesting parties h ave been carefully considered. Also meticulously examined the materials made ava ilable before the Court including the pleadings. 10. It is accepted that the contract so floated by the NIT is a commercial t ransaction and it is within the exclusive domain of the authority concerned to c hoose his own method to arrive at a decision. The State/ authority can fix it s own terms and conditions in inviting tenders and the same cannot be brought wi thin the parameter of judicial review. It is upto the authority to get their any deposit secured and for that purpose any condition of such nature so put cannot be subject to judicial scrutiny. 11. In Poddar’s case (supra), it appears, no such condition as regards co nsequence in the related NIT was laid down and as such it was permissible on the part of the authority to deviate from their stipulated condition. In the ins tant case, the stipulated consequential condition is known to be petitioner and it is, therefore, incumbent on him to satisfy those terms and conditions while submitting the tender paper. Moreover by insertion of the consequential clause to the term and condition in question , the same has made itself a mandatory p rovision. 12. In Global Engineering’s case (Global Engineering Ltd. and ors. -Vs- A dvacne Exports Ltd. and ors reported in AIR 2005 SC 2653 in paragraph -8 the Supreme Court opined that the deposit of some amount of earnest money was a nor mal condition of tender. The object was that only such parties who were financia lly sound and were serious in getting work of contract should make a bid other wise any number of person who having no capacity financial or otherwise would li ke to take a chance by making a bid. 13. In G.B.Mahajan’s case(G.B.Mahajan and ors.-Vs- Jalgaon Municipal Counci l and ors reported in AIR 1991 SC 1153 ) paragraph 43 while discussing the sco pe of reasonableness in the administrative law, the Apex Court quoting the obser vation from a case of Associated Provincial Picture Houses Ltd. Vs.Wednesbury Corporation reported in 1948 1 KB-223 equivalent to 1947-2 All ER 680, disting uished the nature of reasonableness into two parts i..e. proper use and improper abuse of power. In the instant case relying on this decision, it is argued th at the action taken by the authority for asking earnest money through the mode o f payment from a Nationalized Bank was done in exercise of proper use of power a nd the same action was absolutely made in bonafide. It is strenuously argued t hat nowhere in the pleadings in the instant case the petitioners have ever alle ged any malafide or colourable exercise of power. 14. In a case of Air India’s case( Air India Ltd. -Vs- Cochin Internationa l Airport reported in AIR 2000 SC 801), in paragraph-7 the Supreme Court hel d as under :- 7. The law relating to award of a contract by the State, its corporations and b odies acting as instrumentalities and agencies of the Government has been settl ed by the decision of this Court in Ramana Dayaram Shetty v. International Airpo rt Authority of India, Fertilizer Corpn. Kamgar Union(Regd) V. Union of India, CCE v. Dunlop India Ltd.,Tata Cellular v. Union of India ,Ramniklal N.Bhutta v. State of Maharastra and Raunag International Ltd. V. I.V.R Construction Ltd. Th e award of a contract, whether it is by a private party or by a public body or the State, is essentially a commercial tansaction. In arriving at a commercial decision considerations which are paramount are commercial consideration.The St ate can choose its own method to arrive at a decision. It can fix its own terms of invitation to tender and that is not open to judicial scrutiny. It can enter into negotiations before finally deciding to accept one of the offers made to it . Price need not always be the sole criteria for awarding a contract. It is fre e to grant any relaxation for bona fide reasons. If the tender conditions permi t such a relaxation. It may not accept the offer though it happens to be the hi ghest or the lowest. But the State, its corporation, instrumentalities and ag encies are bound to adhere to the norms, standards and procedures laid down by t hem andcannot depart from them arbitrarily. Though that decision is not amenable to judicial review, the court can examine the decision making process and inte rfere if it is found vitiated by mala fides, unreasonableness and arbitrariness. The State, its corporations, instrumentalities and agencies have the public dut y to be fair to all concerned. Even when some defect is found in the decision ma king process the court must exercise its discretionary power under Article 226 w ith great caution and should exercise it only on furtherance of public interest and not merely on the making out of a legal point. The court should always keep the larger public interest in mind in order to decide whether its intervention is called for or not. Only when it comes to a conclusion that overwhelming pub lic interest requires interference, the court should intervene. . 15. The Apex Court in a case B.S.N Joshi’s case ( M/S B.S.N. Joshi and Sons Ltd. -Vs- Nair Coal Services Ltd. and ors. reported in AIR 2007 SC-437) categor ically underlined the parameters and scope of judicial review in a contractual matter in paragraph 68 as under :- 68. We are also not shutting our eyes to words the new principles of judici al review which are being developed: but the law as it stands now having regar d to the principles laid down in the aforementioned decisions may be summarized as under :- (i) If there are essential conditions, the same must be adhered to : (ii)If there is no power of general relaxation, ordinarily the same shall not be exercised and the principle of strict compliance would be applied where it is possible for all the parties to comply with all such conditions ful ly : (iii). If, however a deviation to made in resolution to all the parties in r egard to any of such conditions, ordinariy agains a power of relaxation may be h eld to be existing : iv) The parties who have taken the benefit of such relaxation should not or dinarily be allowed to take a different stand in relation to compliance of anot her part of tender contract particularly when he was also not in a position to comply with all the conditions of tender fully, unless the court otherwise fin ds relaxation of a condition which being essential in nature could not be relaxe d and thus the same was wholly illegal and without jurisdiction : (v) When a decision is taken by the appropriate authority upon due considerat ion of the tender document submitted by all the tenderers on their own merits an d if it is ultimately found that successful bidders had in fact substantially complied with the purport and object for which essential conditions were laid d own, the same may not ordinarily be interfered with. (vi) The contractors cannot form a cartel, if despite the same, their bid s are considered and they are given an offer to match with the rates quoted by t he lowest tender, public interest would be given priority. (vii) Where a decision has been taken purely on public interest, the Court ordinarily should exercised judicial restraint. 16. Be it also noted herein that in the instant case, the specific consequen tial condition to the effect that Demand Draft of any associated Banks of Stat e Bank of India shall not be accepted has been known to the tenderers includi ng the petitioners and notwithstanding such condition, the petitioner, being well aware of the same, has submitted the Account Payee Pay Order issued from the Dena Bank in clear violation of the term and condition as stipula ted in the NIT. 17. In view of the above, this Court is of the firm opinion that the conditi on so stipulated in the NIT has been violated by the petitioner and as such, the tender submitted by the petitioner would be liable to be rejected. The impugn ed action of the HPC, is, therefore, not interfered with. 18. In view of what has been stated, discussed and observed above, this Cou rt finds that this writ petition is devoid of any merit and the same stands dism issed. 19. However, there shall be no order as to costs.